Real Estate Sector Reaps Indirect Benefits from Budget 2026 Capex Boost and Risk Fund

Realty sector leaders have termed Union Budget 2026-27 as infrastructure-led and growth-oriented, saying higher capital expenditure, asset monetisation, and risk-sharing mechanisms could accelerate project execution, improve financing access, and support long-term demand.

Industry executives said the government’s decision to raise capital expenditure and introduce financing support tools signals policy continuity around infrastructure-driven growth, which has strong spillover effects on housing, commercial real estate, and urban expansion.

Budget 2026 signals an infrastructure-first strategy, with public capital expenditure raised to ₹12.2 lakh crore. Prakhar Agrawal, Director of Rama Group, said the increase in capital spending strengthens the policy thrust on infrastructure-led expansion. “Raising capital expenditure to Rs 12.2 lakh crore reinforces the government’s commitment to infrastructure-led growth,” he said. He added that financing reforms will support private sector participation and industrial real estate demand. “The Infrastructure Risk Guarantee Fund will strengthen lender confidence and encourage private participation, while CPSE asset monetisation and freight corridor expansion will support commercial and industrial real estate growth,” Agrawal said.

Developers said infrastructure-linked spending would especially benefit urban expansion corridors and emerging real estate clusters linked to logistics and manufacturing. Vibhor Tyagi, MD of VVIP Group, said the Budget’s urban infrastructure push could directly improve the homebuyer experience. “For homebuyers, the Budget’s focus on Tier 1 and Tier 2 city growth translates into improved infrastructure, better connectivity, and more reliable housing delivery,” he said. He added that financing and monetisation measures will support project execution and transparency. “The government’s push to strengthen lender confidence and accelerate asset monetisation will ensure smoother project completion and enhanced transparency. Over the medium term, these measures will lead to improved liveability, wider housing choices, and stronger long-term value for homebuyers investing in well-planned urban locations,” Tyagi said.

However, some industry stakeholders pointed out that while macro-economic and infrastructure measures are positive, the Budget lacked targeted policy support for affordable housing. Anuj Puri, Chairman of ANAROCK Group, said the Budget delivered broader growth triggers but limited direct sector relief. “Union Budget 2026-27 focused on sustained economic growth, infrastructure development, MSMEs, tourism, high-speed rail corridors, and manufacturing. From a real estate perspective, it has delivered limited direct but various indirect benefits—acting more as a growth catalyst than an instant rescue cavalry,” he said. He also flagged the continued slowdown in affordable housing demand. “One major disappointment for the real estate sector was that there were no major announcements for affordable housing, which has been in free fall since the pandemic. ANAROCK data indicates that the sales share of affordable housing plummeted after the pandemic—from over 38% in 2019 to 26% in 2022 to just around 18% in 2025,” Puri claimed.

Sector participants also highlighted the multiplier impact of transport and logistics infrastructure on land values, urban expansion, and premium housing demand. Jitendra Yadav, Director of Roots Developers, said the Budget marks a structural shift in infrastructure strategy. “Union Budget 2026-27 is a master plan in shifting India’s real estate sector from asset creation to asset efficiency,” he said. He added that transit and manufacturing push will reshape premium housing geography. “Integration of seven high-speed rail corridors like Delhi-Varanasi, the government isn’t just moving people, but expanding the very boundaries of metropolitans like Delhi NCR. The introduction of the Infrastructure Risk Guarantee Fund and dedicated CPSE REITs provides institutional liquidity to the sector,” Yadav said. He further noted that domestic manufacturing support could compress project timelines. “Most crucially, the push for domestic manufacturing of high-value equipment, from tunnel borers to firefighting systems, will drastically compress project timelines. For the premium housing segment, these factors will help prime locations, turning high-speed transit hubs into the next prestigious address for bespoke living. We are witnessing the beginning of a leaner, technologically superior, and self-reliant Indian infrastructure,” he added.

Developers said higher infrastructure spending historically improves project viability and accelerates private investment cycles. Vikas Garg, Joint Managing Director of Ganga Realty, said rising capex signals long-term policy commitment. “The sustained rise in capex spending is a clear indication of the government’s long-term vision and commitment to infrastructure-driven growth, which is essential for the real estate industry,” he said. He added that financing access remains critical for project execution. “Improved roads, railways, and overall infrastructure have a direct bearing on improving project feasibility and demand,” Garg said.

Industry leaders also noted that monetisation of public sector real estate assets could deepen institutional participation in the property market. RajniKant Mishra, Founder and Chairman of Amrawati Group, said risk-sharing measures will help improve the project execution environment. “The Union Budget 2026 shows a strong commitment to the development of the real estate and infrastructure sector in India. The Infrastructure Risk Guarantee Fund will be a key factor in de-risking projects during the construction stage,” he said. He added that asset monetisation and regional infrastructure development will broaden growth opportunities. “The fast-track use of REITs for the monetisation of CPSE real estate assets will help in improving market depth,” Mishra said.