The Union Budget 2026 presents a positive outlook for India’s real estate sector. It focuses on long-term economic growth through a strong emphasis on manufacturing, digital infrastructure, and regional development. While there are no direct incentives for housing, industry experts believe the measures will support demand across residential, commercial, and industrial real estate, especially in Tier 2 and Tier 3 cities.
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Manufacturing and Digital Expansion to Support Real Estate Growth
A key focus of the budget is to boost manufacturing. Industry leaders say real estate demand is set to rise as growth accelerates in sectors such as textiles, healthcare, semiconductors, rare earths, artificial intelligence, and AVGC (Animation, Visual Effects, Gaming, and Comics). It is expected to increase demand for factories, warehouses, data centres, and technology parks.
Another key announcement is the proposed tax holiday for foreign cloud service providers until 2047. This step is likely to attract global technology companies to India and boost investments in data centres.
It will strengthen India’s position as a major hub for digital and cloud services.
Tier 2 And Tier 3 Cities Become Key Growth Centres
The Union Budget 2026 also focuses on developing Tier 2 and Tier 3 cities. The government plans to invest ₹5,000 crore per City Economic Region over the next five years to support urban growth beyond metro cities.
The goal is to improve infrastructure, transport connectivity, and urban facilities in smaller cities. It also aims to support tourism, skill development, and infrastructure in temple towns and growing urban areas.
This push will make these cities more attractive for businesses and investors. Lower costs and improved infrastructure will boost demand for housing, hotels, and retail in Tier 2 and Tier 3 markets.
REITs and InvITs Open New Investment Opportunities
Another critical aspect of the budget is the focus on asset monetisation through REITs and InvITs. It will allow investors to participate in income-generating real estate assets without owning physical property.
Tanuj Shori, Founder and CEO of Square Yards, said that monetising public-sector real estate through REITs and InvITs will make real estate investment more accessible to retail investors. He added that more listings are expected across office, retail, logistics, data centres, and infrastructure assets.
This move is expected to improve liquidity in the real estate market. It will enhance transparency and governance and increase investors’ confidence.
Luxury Housing Likely to Remain Stable
The premium and luxury housing segment is expected to remain stable. Policy continuity, improved urban infrastructure, and overall economic stability are likely to build confidence among buyers in this segment. High-end homebuyers are expected to continue showing interest despite global uncertainties.
Positive Outlook for the Real Estate Sector
Although the Union Budget 2026 does not provide direct relief for housing, its focus on manufacturing, infrastructure, and regional growth is expected to benefit real estate demand gradually.
Improved job opportunities, better connectivity, and increased investments are likely to support both residential and commercial real estate across Tier 2 and Tier 3 cities.
Experts believe these measures will set the stage for sustained economic and urban development in India's real estate sector.
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Business Standard Hindi: https://bit.ly/4kdfoH7 | ABP Live: https://bit.ly/4aabSbI
BW Businessworld: https://bit.ly/4a7QaW1
Published Date: Feb 02, 2026
