Union Budget 2026: Boosting Real Estate Growth from Tier II Cities to Retail Expansion
Union Budget 2026 has drawn a largely positive response from real estate and investment leaders, who see the government’s sustained focus on infrastructure, urban development, and capital expenditure as a key catalyst for long-term property market growth.
From Tier II and Tier III cities to digital infrastructure and retail-led expansion, industry stakeholders believe the policy thrust could reshape demand patterns across segments.
Infra push to strengthen housing demand Amrita Gupta, Director of Manglam Group, said the Budget has reinforced confidence in India’s real estate growth story. According to her, the sustained focus on infrastructure creation, urban development, and housing-led demand lays a strong foundation for long-term, planned growth across Tier II and Tier III cities. She added that higher public capital expenditure and strengthening emerging urban centres will improve liveability, connectivity, and the overall quality of urban ecosystems, which should enhance end-user confidence and support stable housing demand. Gupta noted that for developers like Manglam Group, the Budget provides a positive and enabling outlook for residential growth in emerging cities.
Capex and risk guarantees to boost funding confidence Binitha Dalal, Founder and Managing Partner of Mt. K Kapital, highlighted that Union Budget 2026–27 signals sustained momentum in infrastructure and real estate-led growth, with public capital expenditure proposed at Rs 12.2 lakh crore for FY27. She pointed out that the proposed Infrastructure Risk Guarantee Fund is a meaningful step, as it can strengthen lender confidence and reduce financing risks during the development and construction phases of large projects. Dalal also emphasised the government’s push to position India as a global hub for next-generation digital infrastructure, along with the introduction of dedicated REITs to accelerate the recycling and monetisation of CPSE real estate assets, opening new avenues for institutional capital and better asset utilisation.
Tier II, Tier III and temple towns in focus Mohit Goel, Managing Director of Omaxe Ltd, said the Union Budget 2026 reinforces India’s growth momentum through a strong and sustained commitment to infrastructure and urban development, with public capital expenditure rising to Rs 12.2 lakh crore in FY27. He noted that what stands out is the sharp focus on Tier II and Tier III cities such as Chandigarh, Indore, and Ludhiana, along with culturally significant temple towns like Ayodhya and Vrindavan. Goel observed that these locations are evolving from being primarily pilgrimage centres into vibrant urban and economic hubs, supported by infrastructure upgrades, tourism-led activity, and renewed civic investment.
Industrial corridors and REITs to amplify real estate potential Samir Jasuja, Founder and CEO of PropEquity, said the Budget’s emphasis on infrastructure-led growth, development of industrial corridors and manufacturing hubs, data centres, high-speed rail corridors, and dedicated freight corridors will amplify the economic potential of Tier II and Tier III cities. He also highlighted the recycling of CPSE real estate assets through dedicated REITs and the allocation of Rs 5,000 crore per city economic region over five years as steps that will propel real estate growth across categories. According to Jasuja, these measures will pave the way for comprehensive development of the Indian economy by strengthening urban ecosystems beyond metros.
Retail and consumption to benefit from connectivity Ashish Bhutani, CEO of Bhutani Infra, said the Union Budget 2026-27 sets the stage for a consumption-led growth cycle in India’s retail economy. He attributed this to easing tax frictions, backing MSMEs, and decisive investment in logistics and connectivity, which directly strengthened purchasing power and last-mile access. Bhutani added that the real impact will be felt beyond metros, as organised, digital, and neighbourhood retail expand deeper into Tier II and Tier III markets. In his view, the Budget does not just support retail growth but democratises it.
Organised real estate to expand beyond metros Amit Modi, Director of County Group, said the decision to raise capital expenditure to Rs 12.2 lakh crore reinforces the government’s long-term commitment to infrastructure-led growth, which is critical for the real estate sector. He noted that a sustained infra push in Tier II and Tier III cities will improve connectivity, expand urban infrastructure, and unlock new residential markets beyond metros. Modi added that as these cities integrate into regional growth corridors, organised and planned real estate development is likely to rise. He also said the Infrastructure Risk Guarantee Fund will strengthen the ecosystem by improving funding confidence and reducing execution risk for long-gestation projects, encouraging greater participation from developers and institutional investors.
Outlook Industry leaders broadly agree that Budget 2026 has set the tone for real estate growth by combining infrastructure investment, financial risk mitigation, and urban expansion. With a clear emphasis on emerging cities, asset monetisation, and consumption-led development, the policy direction is expected to support housing, commercial, and retail real estate segments over the medium to long term.
