India’s real estate sector is urging the government to use the upcoming Union Budget to revive housing affordability, improve project liquidity and modernise approval systems, as rising land and construction costs continue to pressure both developers and homebuyers.
Industry leaders say the focus should shift from broad incentives to targeted, market-responsive measures that reflect changing urban realities and a more segmented housing market.
“The upcoming Budget is a key opportunity to deepen buyer confidence and strengthen the housing ecosystem,” said Darshan Govindaraju, Executive Director at Vaishnavi Group. “A sustained push on urban infrastructure, access to long-term capital, and ease-of-doing-business reforms will be critical for stable, long-term growth in real estate.”
Several developers have flagged the need to reassess existing definitions of affordable housing, particularly the ₹45 lakh cap that determines eligibility for tax and GST benefits. With property prices climbing sharply in major cities, they argue that current thresholds no longer reflect market conditions.
“As we look ahead to Budget 2026, the sector is seeking not blanket measures, but thoughtful, targeted policies,” said Madhusudhan G, CMD, Sumadhura Group. He added that the affordable housing cap should be reviewed on a city-specific basis so that incentives reach genuine first-time buyers. “Long-pending structural reforms such as a time-bound single-window clearance system and formal recognition of real estate as an industry are also crucial.”
Construction costs have risen steadily in recent years, driven by higher raw material prices, increased compliance costs and a shortage of skilled labour. Developers say these factors have made it increasingly difficult to deliver homes within the existing affordable housing price limits.
“One of the key interventions we urge the government to consider is extending the 1% GST benefit for affordable housing to homes priced up to ₹65–75 lakh,” said Ramji Subramaniam, Managing Director of Sowparnika Projects. “Land prices in cities have risen by 50–75% in recent years, and construction costs have escalated significantly. A revision would reflect current market realities and provide meaningful relief to first-time buyers.”
Others echoed calls for faster approvals and tax rationalisation to ensure timely project delivery and sustainable urban growth.
“Ahead of the Union Budget, the sector hopes for measures that improve housing affordability,” said Neelu Jain, Director at SNN Raj Corp. “Reassessing the 1% GST benefit to reflect current land and construction costs can ease pressure on first-time buyers, while faster approvals and GST rationalisation will support sustainable urban development.”
The government has previously highlighted housing as a key pillar of India’s economic growth and urbanisation strategy. Market participants say policy clarity in the upcoming Budget could play a decisive role in restoring momentum in residential demand across major cities.
