Industry leaders broadly welcomed the long-term direction of Union Budget 2026–27 for the real estate sector, but said the benefits will largely play out over time and hinge on execution, financing access and on-ground implementation, particularly in emerging cities.
They said the Budget’s emphasis on higher capital expenditure, Tier II–III urban development, asset monetisation and risk mitigation signals policy continuity and investment intent, even as immediate demand-side relief remains limited.epend on the pace of infrastructure delivery, financing access and on-ground implementation across emerging markets.
Capex Supports Infrastructure-Led Growth
The rise in public capital expenditure to Rs 12.2 lakh crore in FY27 was welcomed by developers as a strong signal of continued infrastructure-led growth and urban development.
Mohit Goel, Managing Director, Omaxe, said the sustained capex push and the Budget’s focus on Tier II and III cities, including temple towns such as Ayodhya and Vrindavan, are helping these locations evolve into vibrant urban and economic centres, translating into growing demand for organised real estate development from domestic and overseas investors.
Vikas Garg, Joint Managing Director, Ganga Realty, said improved roads, railways and urban infrastructure have a direct impact on project feasibility and demand, adding that the emphasis on infrastructure development in Tier II and III cities and city economic regions will support balanced growth beyond metro markets.
However, they noted that the translation of higher capex into real estate demand will depend on the pace of execution and the timely rollout of urban infrastructure at the local level.
Tier-II, III Cities Gain Attention
Industry leaders said the Budget’s emphasis on infrastructure investment and planned urbanisation is sharpening the focus on Tier II and III cities as the next phase of real estate growth.
Abhay Kumar Mishra, CEO and President, Jindal Realty, said the Budget sends a strong long-term signal for cities such as Sonipat, which benefit from proximity to the national capital and improved connectivity. He said targeted infrastructure investments and city economic region allocations are expected to drive housing, commercial and mixed-use real estate demand in emerging markets.
Yashank Wason, Managing Director, Royal Green Realty, said the Rs 5,000-crore allocation per city economic region and improved connectivity could help these cities evolve into self-sustaining growth centres, shifting the industry’s focus towards a broader “Bharat growth” narrative.
Risk Guarantee Fund And Capital Access
Industry participants said the proposed Infrastructure Risk Guarantee Fund addresses a key concern around construction-phase financing, particularly for large housing and infrastructure projects.
Vibhor Tyagi, Managing Director, VVIP Group, said the fund is a timely intervention that can significantly improve lender confidence and help crowd in private capital during the development phase, supporting sustained momentum across real estate and infrastructure.
Amar Sarin, Managing Director and CEO, Tarc, said the risk guarantee mechanism, along with CPSE REITs, represents a structural reform that deepens capital markets and accelerates asset monetisation.
REITs, InvITs And Asset Monetisation
Industry leaders said the renewed emphasis on REITs and InvITs, particularly for monetising CPSE-owned assets, could strengthen capital access and improve liquidity for real estate and infrastructure projects.
Rajnikant Mishra, Founder and Chairman, Amrawati Group, said accelerated CPSE asset monetisation through REITs will enhance capital flows, improve market depth and unlock new growth corridors nationwide.
Sorab Agarwal, Executive Director, Action Construction Equipment, said the Budget’s focus on domestic manufacturing of construction and infrastructure equipment will boost productivity, reduce import dependence and support faster project execution.
Housing, Retail Demand To Build Gradually
Beyond infrastructure, industry leaders said housing and retail demand is likely to strengthen incrementally rather than surge.
Ashish Bhutani, CEO, Bhutani Infra, said the Budget sets the stage for a consumption-led retail growth cycle, with organised and neighbourhood retail expanding deeper into Tier II and III markets.
Rishi Anand, Managing Director and CEO, Aadhar Housing Finance, said infrastructure expansion in smaller towns will support the housing-for-all mission and create opportunities for underserved communities.
Prakhar Agrawal, Director, Rama Group, said improved civic infrastructure and connectivity are making Tier II and III cities increasingly viable alternatives to metro markets for homebuyers.
While ongoing schemes such as PMAY continue, industry executives said the Budget stops short of announcing any fresh demand-side incentives for homebuyers, limiting near-term relief for the affordable housing segment.
Confidence Improves, Relief Limited
Mohit Jandu, Managing Director, J Infratech, said large-scale investments in transport corridors and the Infrastructure Risk Guarantee Fund will improve execution timelines and support regional integration and tourism-led growth.
Aman Sharma, Founder and Managing Director, Aarize Group, said the Budget restores confidence for developers to plan and invest in large-scale projects, particularly in Tier II markets with strong growth potential.
Amrita Gupta, Director, Manglam Group, said higher capex and urban development focus will improve livability and end-user confidence, supporting stable residential demand in emerging cities.
Pyush Lohia, Director, Lohia Worldspace, said the Budget provides stability and clarity, with REIT-led asset monetisation, city economic regions and infrastructure spending laying the groundwork for balanced growth across residential and commercial real estate.
Overall, industry leaders said Union Budget 2026 lays out a long-term, infrastructure-led roadmap for real estate growth, particularly beyond metros. However, they noted that execution speed, financing access and the absence of direct demand-side support will determine how quickly these policy measures translate into on-ground momentum.