Whalesbook
1. THE SEAMLESS LINK
This performance underscores a stark division in the real estate sector's response to the Union Budget. While the government's sustained emphasis on infrastructure spending garnered praise, the critical affordable housing segment was left wanting.
The Affordable Housing Squeeze
CREDAI, through its National President Shekhar Patel, expressed profound disappointment, stating the Budget "offers nothing concrete for affordable housing." The industry body warned that without policy intervention, the share of affordable housing in new home launches could plummet from the current 18% to as low as 12%. This projection stems from rising construction and land costs, coupled with an outdated definition of affordable housing that fails to reflect current market realities. Experts like Anuj Puri of ANAROCK Group noted the segment has been "in free fall since the pandemic," requiring direct intervention through buyer and developer incentives. The absence of a definition reset or fiscal support for affordable housing is seen as a significant oversight, despite its role as "economic infrastructure."
Economic Implications of Weak Supply
Patel articulated that affordable housing is not merely a welfare program but a critical driver of employment, consumption, and social stability. The projected weakening of supply in this segment carries serious consequences, including potentially higher rentals, longer commutes for the workforce, and a rise in informal housing settlements. CREDAI advocates for urgent policy attention to ensure inclusive and sustainable urban growth, highlighting that the current price and area caps for affordable housing, unchanged since 2017, are no longer aligned with market conditions.
Infrastructure Spending Boost
In contrast to the criticism, CREDAI hailed the government's continued investment in infrastructure. The budget's commitment to public capital expenditure, increased to ₹12.2 lakh crore for FY2026-27, is expected to significantly benefit the property sector. Investments in highways, metros, logistics corridors, and urban infrastructure are anticipated to enhance connectivity, unlock new growth corridors, and support long-term urban development, particularly in Tier-2 and Tier-3 cities. The establishment of an Infrastructure Risk Guarantee Fund to support private developers further signals a proactive approach to infrastructure growth.
Streamlining Business Operations
CREDAI also welcomed the emphasis on improving the ease of doing business. The association indicated that faster approvals and simplified, digitized processes can substantially reduce project timelines and holding costs, benefiting both developers and homebuyers.
Future Outlook and Policy Demands
CREDAI urged the government to provide urgent policy attention to affordable housing. The association had previously called for a National Rental Housing Mission and a revision of the affordable housing definition, including higher carpet area norms and removal of value caps, to address the sector's structural challenges. The lack of direct fiscal incentives for this segment signals a continuing challenge for India's middle and lower-middle classes seeking homeownership.