Budget 2026-27 - Structurally Pro-investment, But No Panacea for Real Estate..!
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.
