Anuj Puri, Chairman – ANAROCK Group
Union Budget 2026-27 focused on sustained economic growth, infrastructure development, MSMEs, tourism, high-speed rail corridors, and manufacturing. From a real estate perspective, it has delivered limited direct but various indirect benefits – acting more as a growth catalyst than an instant rescue cavalry.
One major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. ANAROCK data indicates that the sales share of affordable housing plummeted after the pandemic – from over 38% in 2019 to 26% in 2022 to just around 18% in 2025.
The affordable housing segment was in express need of direct intervention by way of interest stimulants for buyers and developers of affordable housing. The segment needed high-impact measures.
That said, there were some highlights:
- The increase in Public Capex from INR 11.2 lakh crore in FY 2026 to INR 12.2 lakh crore in the new fiscal 2027, with a sharp infrastructure development focus on in Tier 2 and 3 cities, can revive real estate demand and development across these cities.
- Dedicated REITs to recycle Central Public Sector Enterprise (CPSE) assets targets INR 10 lakh crore assets among railway properties, port land, power transmission infrastructure, telecom towers, government properties. The objective is to attract institutional capital without surrendering control over these assets and generate recurring revenue for CPSEs. This supports industry demands for simplified REIT taxation and expanded participation of small/medium REITs. It will deepen institutional capital in Indian real estate infrastructure. However, we must await subsequent policy circulars for a more detailed framework.
- INR 20,000 crore over 5 years for scaling Carbon Capture, Utilisation and Storage (CCUS) across power, steel, cement, refineries, and chemicals will boost sustainable real estate demand. Lower-carbon cement and steel production reduces the carbon impact of construction materials. Developers using CCUS-produced materials can achieve better ESG ratings, attract more ESG-focused institutional capital, and meet emerging green building standards. We will see a higher demand for net-zero certified buildings, and it also lowers sustainability compliance costs. This will result in premium pricing in the hospitality, commercial, and residential segments.
- The tax holiday for data centres till 2047 will boost DC demand. Also, the clause to provide services to Indian market through a local entity will generate more employment. Tier 1 cities like Chennai, Mumbai and Bangalore will see renewed interest from data centre players. Also, tier 2 cities like Jaipur and Vijayawada will very likely see more traction in this segment.
- The INR 300-crore safe harbour threshold expansion provides tax certainty, though its impact on commercial real estate will be modest. We may see a 5–10% incremental uptake in the existing IT hubs of Bangalore, Hyderabad, Pune.
- The new Dedicated Freight Corridor, 7 high-speed rail corridors and sustainable corridors will boost overall development in and around the impacted areas.
This Budget is capex-driven, asset-centric, and structurally pro-investment, with clear financial commitments to MSMEs, manufacturing, technology, biopharma and the green transition. REIT-led monetisation of CPSE commercial assets, long-term policy backing for data centres, focused development of temple towns, and a clear push for Tier-2 and Tier-3 commercial growth together reinforce confidence in real assets, hospitality, and urban expansion.
However, the absence of any direct announcement on affordable housing – particularly around definition reset or fiscal support – is a disappointment, given its importance for urban housing supply and inclusive growth.
