As India prepares for Union Budget 2026, senior figures in the real estate industry are calling on the government to step up support for affordable and rental housing, warning that the sector’s recent growth masks deep structural imbalances.
Anuj Puri, chairman of property consultancy ANAROCK Group, said India’s housing market continues to show headline strength but is becoming increasingly skewed towards higher-end homes. According to industry estimates, residential sales volumes fell by 14% in 2025, even as total sales value rose 6% to nearly ₹6 lakh crore. This, Mr Puri said, reflects a sharp rise in luxury housing demand while affordable housing remains under pressure.
Mr Puri urged the government to use Budget 2026 to sustain investment in last-mile urban infrastructure, arguing that improved connectivity and civic amenities have a direct impact on real estate development. He also called for the reintroduction of the 100% tax holiday under Section 80-IBA, saying the earlier incentive had encouraged developers to launch more affordable housing projects.
He further suggested that the official definition of affordable housing needs to be updated. “A ₹45 lakh price cap no longer reflects market realities,” Mr Puri said, proposing that the threshold be raised to ₹95 lakh for Mumbai and ₹75 lakh for other major cities, while retaining existing size norms.
Rental housing has also emerged as a key concern. Niranjan Hiranandani, chairman of the National Real Estate Development Council (NAREDCO), said rental housing should become a central pillar of the government’s ‘Housing for All’ programme.
Mr Hiranandani called for the removal of restrictive conditions under Section 80 IBA(6)(da) of the Finance Bill and recommended extending tax benefits for affordable rental housing projects to at least five years. He also proposed a five-year tax exemption on rental income from properties held as stock-in-trade, arguing that such investments are long-term in nature.
Beyond housing supply, Mr Hiranandani flagged taxation issues, noting that stamp duty based on circle rates often imposes an excessive burden on buyers and sellers. He also criticised limits on setting off losses against income from house property, saying the rule discourages individual investment in rental housing.
Industry leaders hope Budget 2026 will address these concerns and rebalance growth across the housing sector.
