The Union Budget 2026–27 puts real estate at the center of India's growth strategy, announcing measures that will reshape how projects get funded, delivered, and invested in across the country.The government has raised capital expenditure to ₹12.22 lakh crore, covering spending on long-term assets like infrastructure, buildings, and equipment. This reinforces the government's commitment to infrastructure-led growth. What stands out is the focus on real issues that buyers and investors experience on the ground, including delayed projects, funding pressure during construction and uneven urban services. The measures aim to make development more predictable, improve quality of life and support steady demand, particularly in Tier 2 and Tier 3 cities that are benefiting from stronger connectivity and upgraded infrastructure.

Faster home completion
Affordable housing continues to be a priority, and this has clear implications for people waiting for possession or planning their first purchase. The allocation of ₹18,625 crore for Pradhan Mantri Awas Yojana (PMAY) Urban, along with ₹3,000 crore for PMAY Urban 2.0, is aimed at completing stalled and ongoing housing projects while keeping construction activity consistent. For developers, this steady flow of funding makes it easier to manage cash flows and reduces uncertainty during critical stages of construction.

Buyers are likely to see the impact sooner in cities with established transport links and employment centres. In these locations, policy support can translate more quickly into buyer confidence and actual sales. Stronger oversight of timelines and quality standards also encourages developers to align new supply more closely with genuine end-user demand, supporting a healthier and more transparent housing market.

Smoother project funding
Construction-stage financing remains a pressure point for real estate projects, often leading to slowdowns and delays. The new Infrastructure Risk Guarantee Fund is intended to ease this strain by offering partial credit guarantees to lenders. This can help lower borrowing costs and allow projects to continue smoothly during peak construction periods. Alongside this, effective capital expenditure of ₹17.14 lakh crore across central and state programmes strengthens confidence in the overall funding environment.

Additional reforms further support cash flow across the sector. Manufacturers can defer paying customs duties, while overseas suppliers get five-year tax breaks. Simplified GST processes and lower duties on key construction equipment help reduce costs. Together, these measures make it easier for funds and materials to move through projects without disruption, supporting the timely delivery of large housing and infrastructure developments.

Better everyday infrastructure
The Budget’s approach to urban renewal focuses on improving existing cities rather than expanding endlessly into new areas. The ₹10,000 crore Urban Challenge Fund prioritises redevelopment projects that can tap into existing transport, power, and water networks. This approach typically shortens development timelines and lowers risk. Under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), ₹8,000 crore is  set aside for upgrades to water supply, sewerage, and drainage, while a further ₹7,350 crore is allocated for maintaining these essential services.

Plans to upgrade 200 older industrial clusters aim to modernise infrastructure and zoning, making redevelopment quicker and more efficient. Improved services and clearer planning frameworks can support sustained demand for homes, offices, and retail spaces, while easing pressure on already congested urban areas.

Stronger regional connections
Investment in transport and logistics continues to shape the foundation for balanced regional growth. Projects such as the Dedicated Freight Corridor from Dankuni to Surat, the creation of 20 new National Waterways, and the Coastal Cargo Promotion Scheme are intended to reduce logistics costs and increase the share of inland and coastal shipping from 6% to 12% by 2047.

As logistics costs fall and connectivity improves, demand should rise for warehouses, logistics hubs, and light industrial parks in well-connected districts. Over time, nearby towns are likely to benefit from increased business activity and more consistent property demand, particularly across emerging urban corridors.

Prime locations made accessible
The proposal to move Central Public Sector Enterprise (CPSE) property portfolios into dedicatedReal Estate Investment Trusts (REITs) marks an important shift in how public real estate assets are managed. By converting underutilised land and buildings into income-generating assets, the government can unlock capital for reinvestment while creating new opportunities for domestic and global investors.

If supported by transparent valuation, strong governance, and planned asset upgrades, CPSE-backed REITs can improve liquidity and price discovery in India’s real estate market. They also offer investors access to high-quality assets in prime locations along major transit corridors, helping deepen participation from established investors.

Stable supply chains
The Budget also addresses supply-side resilience, which plays a crucial role in keeping projects on track. New support measures for Micro, Small and Medium Enterprises (MSMEs) include raising credit guarantee cover from ₹5 crore to ₹10 crore, enabling ₹1.5 lakh crore in additional credit over five years to protect smaller construction and logistics firms from input cost pressures. Lower equipment duties and easier payment terms for manufacturers help reduce construction costs and improve supply reliability for developers. These measures support smoother project delivery and more predictable material availability.

A steady outlook ahead
As the new fiscal year begins, India’s real estate sector appears to be on solid footing. The Union Budget 2026–27 builds on a consistent strategy that links housing, infrastructure, and connectivity to long-term growth. Better financing tools, improved city services and stronger transport networks create conditions for smoother project execution and more predictable outcomes.