As Budget 2025-26 draws near, the real estate sector is keenly anticipating key measures that could stimulate growth and address some of the industry's most pressing challenges. The sector is particularly concerned about the downturn in affordable housing and declining market activity, especially in the second half of 2024. The real estate industry is hoping for a comprehensive government intervention to address these issues and encourage economic stability.
A major expectation from the sector is the granting of industry status to real estate, which could unlock several benefits, including tax holidays, access to easier credit, and other incentives that would help both developers and buyers. Affordable housing has faced significant challenges in the aftermath of the pandemic, with a sharp contraction in both demand and supply. According to reports, the sales of affordable homes (priced under Rs 40 lakh) fell to just 18% of total sales in 2024, down from 38% in 2019. This highlights the urgent need for government support in reviving the segment.
Infrastructure development will also be a critical area of focus for the government, with the real estate sector seeking enhanced government investments in infrastructure projects. In recent years, the government's capex share has been much higher than that of the private sector, making it crucial for continued investments in roads, transportation, and urban development to support long-term real estate growth. The budget is expected to prioritize this aspect to strengthen economic stability and promote job creation.
The real estate sector is also seeking relief in the form of tax reforms, including a reassessment of GST treatments and tax holidays for affordable housing. This could help increase the supply of affordable homes and make them more accessible to buyers. Additionally, the sector is advocating for greater support for SMEs and MSMEs to help drive growth and generate employment in the real estate and construction sectors.
With several challenges looming, the real estate sector is looking to Budget 2025-26 for much-needed relief, hoping that the government will prioritize infrastructure development and provide measures that can revive demand, particularly in the affordable housing segment, which remains crucial for both economic recovery and societal well-being.
