The 2026-27 budget failed to make any significant announcements for affordable housing, leaving the middle-class and builders disappointed. However, decisive moves on government properties and data centers have opened new avenues for investors. Experts from the real estate sector opine that the central budget did not take concrete steps to rejuvenate the demand for affordable and economical housing.
What Do Experts Say?
Reacting to the situation, Anuj Puri, Chairman of ANAROCK Group, expressed that the budget is a considerable disappointment for the real estate sector. He highlighted the continuous decline in affordable housing sales post the COVID-19 pandemic, and the absence of any specific announcements in the budget has become a point of concern for the sector.
According to ANAROCK's data, there has been a steep drop in the sale of affordable houses post-pandemic. In 2019, these homes accounted for over 38% of total sales, which fell to 26% in 2022 and is projected to drop to just 18% by 2025. Anuj Puri emphasized the pressing need for direct benefits such as interest rate cuts for buyers and builders to revive the sector. He further indicated the absence of announcements related to redefining affordable homes or providing economic aid is disheartening, as fulfilling the dream of a home for everyone in urban areas is essential.
Also Read: After Metros, It's Time for Small Cities: Real Estate Sector Announcements in the Budget
Budget Disappointment
Shishir Baijal, Chairman of Knight Frank India, echoed similar sentiments. He stated that it's unfortunate that the budget did not offer specific financial relief to promote real estate, especially for affordable housing, which remains a major concern for the entire sector.
He further observed that the budget's focus on opportunities in smaller and medium-sized cities (Tier II and Tier III) and improved connectivity in urban areas would strengthen demand for homes and warehouses in the future. Finance Minister Nirmala Sitharaman proposed creating REITs (Real Estate Investment Trusts) to monetize major assets of public sector companies (CPSEs) and optimize their usage in her budget speech.
Anshuman Magazine, Chairman and CEO of CBRE, welcomed this decision. He noted that bringing government properties under 'REIT' is a significant change, bolstering the market due to the substantial assets these companies hold. Furthermore, it will enhance confidence and investment from large investors such as mutual funds in the sector.
Anuj Puri from ANAROCK explained that special REITs for public sector company properties aim to better utilize assets worth approximately 10 lakh crore rupees, including railway properties, port land, power transmission, telecom towers, and government buildings. Puri outlined that the goal is to attract large investors' funds without losing control over these assets to ensure a steady income stream for government companies. This move will also strengthen the demand for simplifying tax rules on REITs and incorporating small to mid-sized investors.
Also Read: From Delhi-NCR to Goa, Real Estate Shines... Insights from the Budget
