A growing gap in the Indian housing market
Anuj Puri, chairman of ANAROCK Group, warns of a deepening structural imbalance and highlights the risk of a two-tiered housing market. He notes that while luxury home sales and prices dominate the headlines, owning a home is becoming increasingly unaffordable for a large section of Indians.
Without decisive action in Budget 2026, he warns, the gap between premium housing and affordable basic housing could widen further, leaving millions of people out of the ownership cycle.
Affordable housing urgently needs financial support
Revitalizing affordable housing is emerging as a central theme in the sector’s visions. Anuj Puri emphasizes that reintroducing the 100% tax exemption for developers under Section 80-IBA could be the most immediate and effective step to boost supply. According to him, the incentive – which was withdrawn in 2021 – had previously encouraged broader participation from developers and accelerated the launch of affordable projects.
Industry experts argue that without restoration of such incentives and recalibration of affordability thresholds, supply and demand in this crucial segment will remain subdued.
Last Mile infrastructure: from policy to implementation
Another recurring question is the acceleration of infrastructure. Puri underlines that while initiatives such as the National Infrastructure Pipeline and Prime Minister Gati Shakti are positive, the speed of implementation remains a concern.
He calls for immediate funding priority for extensions of metro lines, suburban rail networks, ring roads connecting peripheral regions, and integrated logistics corridors – measures seen as essential for unlocking new housing corridors and easing pressure on urban cores.
Stimulate housing demand through consumer-oriented reforms
On the demand side, Savills India CEO Anurag Mathur says Budget 2026 should focus on reforms that directly improve household affordability.
He proposes increasing the standard deduction or tying it to a percentage of income, arguing that higher disposable incomes can meaningfully support housing demand among middle-income and first-time buyers, especially in urban centers.
Rental properties and REITs as the next lever for affordability
Rental properties are increasingly seen as a structural solution rather than as an emergency solution. Mathur emphasizes the need for policy support to expand professionally managed rental housing, including enabling multifamily REITs.
Such measures, he said, can improve affordability, increase worker mobility and attract institutional capital in a segment that remains underdeveloped despite increasing urbanization.
Land reforms and unlocking supply
In addressing supply-side constraints, Mathur also highlights the importance of pragmatic land reforms and monetization of underutilized government land. These steps could reduce development costs, unlock land supply in key urban markets and accelerate housing construction.
Affordable housing is still under pressure
Adding to these concerns, Shishir Baijal, international partner, chairman and managing director, Knight Frank India, says affordable housing continues to underperform despite the overall market resilience.
He attributes this to declining affordability, rising input costs and limited end-user support. He warns that without a timely recalibration of policy, demand in this segment could remain structurally weak.
Realign incentives with urban cost realities
Baijal emphasizes the need to realign housing incentives with current urban cost structures, especially in major cities where existing price thresholds no longer reflect market realities.
He believes that targeted fiscal support for homebuyers, along with measures that improve the viability of projects for developers, can help revive both demand and supply in the housing segments.
Infrastructure, mobility and inclusive urbanization
Both Baijal and Mathur emphasize that sustainable investments in public transport and urban infrastructure are crucial for long-term inclusion. Improved connectivity to peripheral growth corridors can increase affordable land supply, while continued development of GCCs and office hubs in Tier II and III cities can drive decentralized job creation and more balanced urban growth outside the metros.
Budget 2026: a moment for decisive action
In terms of themes, industry leaders agree that Budget 2026 is a defining moment. Experts say bold, coordinated policy action is essential to prevent a deepening housing gap and ensure India’s urban growth remains inclusive and sustainable, from restoring affordable housing incentives and accelerating infrastructure implementation to strengthening rental housing and consumer affordability.
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