‘No major announcement for affordable housing is a major disappoiontment’

Anuj Puri

The Union Budget 2026-27 focuses on sustained economic growth, infrastructure development, MSMEs, tourism, high-speed rail corridors, and manufacturing. For the real estate sector, the Budget delivers limited direct benefits but several indirect advantages. It acts more as a growth catalyst than an immediate rescue.

Affordable Housing Still Overlooked

A major disappointment for the real estate sector is the lack of announcements for affordable housing. This segment has been in decline since the pandemic. According to ANAROCK data, affordable housing sales fell from over 38% in 2019 to 26% in 2022 and just 18% in 2025.

Affordable housing needed high-impact measures such as interest incentives for buyers and developers. The absence of direct support highlights the urgent need for policy intervention to revive this crucial segment.

Infrastructure and Capex Boost

Public capital expenditure rises from INR 11.2 lakh crore in FY 2026 to INR 12.2 lakh crore in FY 2027. The focus on Tier-2 and Tier-3 cities is expected to revive real estate demand and development in these regions.

The Budget also proposes REIT-led monetisation of CPSE assets worth INR 10 lakh crore. Assets include railway properties, ports, power transmission infrastructure, telecom towers, and government properties. This move aims to attract institutional capital, deepen real estate investments, and generate recurring revenue for CPSEs.

Green Real Estate and Sustainability

The Government allocates INR 20,000 crore over 5 years to scale Carbon Capture, Utilisation, and Storage (CCUS) in power, steel, cement, refineries, and chemicals. This supports sustainable real estate by lowering carbon emissions in construction materials. Developers using CCUS materials can achieve better ESG ratings, attract institutional capital, and command premium pricing in commercial, residential, and hospitality segments.

Boost to Data Centres and Commercial Real Estate

The tax holiday for data centres till 2047 will drive demand in Tier-1 cities like Chennai, Mumbai, and Bengaluru, and likely expand to Tier-2 cities such as Jaipur and Vijayawada.

Additionally, the INR 300-crore safe harbour threshold expansion provides tax certainty for commercial real estate. Though modest, this may increase uptake in IT hubs like Bengaluru, Hyderabad, and Pune by 5–10%.

Transport and Connectivity Projects

The Dedicated Freight Corridor, seven high-speed rail corridors, and sustainable corridors will drive real estate and commercial development in surrounding areas. These projects enhance connectivity and create new investment opportunities.

Key Takeaways for Real Estate

The Union Budget 2026-27 is asset-centric, capex-driven, and pro-investment. It prioritizes MSMEs, manufacturing, technology, biopharma, and green infrastructure. While REIT monetisation, data centre incentives, and Tier-2/Tier-3 development boost investor confidence, the lack of direct measures for affordable housing remains a missed opportunity.

Overall, the Budget signals long-term growth for urban expansion, hospitality, and commercial real estate, while highlighting the need for stronger support in inclusive housing.

Anuj Puri is Chairman, ANAROCK Group