Real estate leaders call for affordability relief, GST reforms, faster approvals and policy clarity to sustain housing demand, coworking growth, and premium real estate momentum.
Indian real estate enters Budget 2026 on relatively strong footing. Housing demand has held firm despite global uncertainty, office leasing is being reshaped by flexible work models, and premium residential markets are seeing renewed traction. Yet beneath this momentum lies a shared message from industry leaders: growth needs policy support to stay broad-based, inclusive, and sustainable.
From affordability concerns to tax rationalisation and faster approvals, developers and workspace operators see the upcoming Union Budget as a chance to remove long-standing bottlenecks and align regulation with how Indians now live and work.
Housing Demand Is Strong, Affordability Is Not
Ramani Sastri, Chairman and MD of Sterling Developers, believes the sector’s resilience is rooted in rising aspirations and long-term confidence in residential real estate as an asset class. As incomes rise and urbanisation accelerates, more Indians are willing to commit to home ownership for stability and long-term returns.
The challenge, however, is affordability. For a large segment of buyers, especially in cities, home prices and financing costs remain a stretch. Sastri argues that expanding the definition of affordable housing in urban areas could bring many more homebuyers under existing benefits, directly boosting end-user demand.
Another key ask is an interest subsidy for first-time buyers who currently fall outside affordable housing schemes. This group represents genuine demand, but is often priced out due to high EMIs. A targeted subsidy could meaningfully unlock sales.
Tax Relief and Industry Status: Old Demands, Fresh Urgency
Sterling Developers also points to the need for higher tax deductions on home loan interest. Raising the current Rs. 2 lakh cap to Rs. 5 lakh, Sastri says, would inject fresh momentum into housing demand at a time when borrowing costs remain elevated.
Equally important is the rationalisation of GST on under-construction homes and faster project approvals. Delays add to costs, which are eventually passed on to buyers. Granting industry status to real estate, a long-standing demand, could improve access to affordable funding and streamline regulatory processes.
The ripple effect, Sastri notes, goes well beyond housing. Real estate activity stimulates nearly 250 ancillary industries, from cement and steel to logistics and services, making it a powerful engine for job creation and GDP growth.
Coworking Wants Tax Clarity, Not Just Popularity
On the commercial side, coworking spaces have moved from niche to mainstream. Manas Mehrotra, Founder of 315Work Avenue, sees flexible workspaces as a permanent feature of India’s office market, not a temporary response to hybrid work.
Large enterprises, startups, and global firms are increasingly using coworking for agility, speed, and talent access. Yet Mehrotra argues that taxation has not kept pace with this shift.
A concessional, slab-based GST rate for coworking services, especially for startups and small businesses, could significantly ease cash flow pressures. For operators, the bigger issue is blocked input tax credit on interior fit-outs, a major cost given the infrastructure-heavy nature of coworking spaces.
He also calls for rationalising the 10 percent TDS under Section 194AB on coworking payments, which currently strains working capital for operators and clients alike.
Infrastructure, Finance, and the Push Beyond Metros
Mehrotra believes that better access to institutional finance at competitive rates is essential if coworking players are to scale responsibly. Combined with infrastructure development and single-window clearances, this could accelerate the spread of flexible workspaces into non-metro cities.
As organisations place greater emphasis on employee well-being and productivity, demand for A-grade offices and well-designed shared spaces is only set to rise. Agile real estate, he argues, is now a strategic priority across sectors, making ease of doing business and regulatory clarity critical for the industry’s next phase.
Premium and Luxury Housing: A Quiet Shift in Demand
While affordability dominates policy discussions, another trend is gaining strength. Harsh Jagwani, Managing Director of Notandas Realty, points to rising demand for mid-premium and luxury homes across urban India
Changing lifestyles, nuclear families, and higher expectations around space and amenities have shifted buyer preferences. Jagwani believes Budget 2026 should acknowledge this reality by streamlining approvals through a single-window clearance system and accelerating land and property digitisation.
Cleaner land titles, stricter escrow enforcement under RERA, and digital registration can reduce transaction risk and financing delays, making premium housing more attractive to both buyers and lenders.
GCCs, Offices, and the Next Growth Cycle
Jagwani also highlights the role of Global Capability Centers in shaping future demand. Incentive-led policies to attract GCCs could significantly boost commercial real estate, particularly premium office spaces. As global companies expand their India footprint, demand for high-quality workplaces is expected to rise steadily.
Together, housing, coworking, and commercial real estate form a connected ecosystem. Budget 2026, industry leaders argue, has the opportunity to align policy with these shifts, ensuring growth is not only strong, but smart, inclusive, and future-ready.
