Budget 2025 Expectations: What's Next For India's Real Estate Sector In 2025?

Real estate developers and other industry stakeholders have voiced their wishes for legislation and changes that would assist in solving the nation's housing requirements and promote overall economic growth as the Union Budget for 2025-2026 draws near. There must be a government-led drive for real estate to reach the $1 trillion mark by 2030, and this budget is the right time to make decisions that will advance this sector's growth. Recent data indicates that new home sales have declined for the first time in 2024 as a result of rising home prices, high borrowing costs, and a generalised sense of conservatism brought on by four years of steady, rapid development. In order to guarantee sustained momentum and provide the conditions for the industry to reach its $1 trillion goal by 2030, this budget for 2025 can address issues like high prices and affordability.

Union Budget 2025: What does the real estate sector expect?

According to recent statistics, new house sales have decreased for the first time in 2024 owing to increase in house prices, high interest rates for borrowing and general conservative sentiment which has cropped up due to the 4 years of constant high growth. For the growth to continue and real estate to achieve the $1 Trillion dollar by 2030, there needs to be a government led push and this budget is the appropriate time for decisions to push this industry forward to grow, said Avinash Rao, Founder of Alt DRX.

- Developer Led: High cost of material and construction can not be reduced or moderated immediately, but adjustments to input tax credit will reduce the cost burden on developers and subsequently pass it on to the home buyers. Change of policies to attract domestic and international real estate funds will provide a big push for developers to raise capital and complete their projects on time.

- Home Buyer Led: Changes in current tax exemptions on house loans will help with reducing cost burden on home buyers and bring relief. Subsidies on affordable housing will bring demand to a category which has not grown and caters to the larger Indian population.

The real estate sector is at a turning point. Sustaining growth will require government intervention through tax reforms, affordable housing subsidies, and incentives for developers to access capital. By addressing challenges like high costs and affordability, this budget can ensure continued momentum and set the stage for the sector to achieve its $1 trillion target by 2030, driving both economic growth and homeownership for millions, said Avinash Rao.

Budget 2025-26: Real Estate Sector Calls for Reforms and Tax Incentives

"With the Union Budget of 2025-26 approaching, real estate developers and other industry stakeholders have expressed their hopes for regulations and reforms that will help address the housing needs of the country and boost overall economic growth. In my opinion, it is time to take note of the changing needs of society and align its policies with them. A special tax dispensation may be considered to encourage organised development of rental housing, student housing, and dormitories for industrial workers. Tax incentives will bring in much-needed focus onto these segments and attract institutional capital enabling large scale development of alternate housing to address a growing need of the society," said Routhu Nagaraju - Chief Executive Officer, Experion Developers.

Real Estate Eyes Affordable Housing Boost in Budget 2025-26

Another important step would be to align the pricing cap of Rs. 45 lakhs for affordable housing, set in 2017, with the current market reality so that the benefit of a lower GST rate can be availed by those looking to buy affordable housing. Considering the average inflation over the last seven years, the affordable housing definition may be amended to cover houses priced up to Rs. 80 lakhs. The forthcoming budget is seen as a pathway to sustainable growth. We look forward to the budget proposals with optimism, as per Routhu Nagaraju.