Why India's Real Estate Market is Far from a Bubble: Investment Banker's Insights
Investment banker Sarthak Ahuja argues that India's real estate sector is structurally protected and supported by government policies, demographics, and job creation, making it a long-term priority.
Real EstateInvestmentGovernment PolicyDemographicsJob CreationReal Estate NewsJun 30, 2025
The investment banker's post is a rebuttal to the popular belief that India’s property market is overheated or on the verge of correction. In a LinkedIn post, Ahuja argues that the sector isn’t just growing, it’s structurally protected and relentlessly supported by policy. Why? Because real estate, he says, is the Indian government’s “favourite baby.”
“They will always keep making policy for its growth compared to all other children,” he wrote, using a metaphor to highlight the long-standing tilt in favour of the housing market over other asset classes. At the heart of Ahuja’s argument is taxation. No other investment avenue, he says, enjoys the kind of fiscal privileges that real estate does. From a flat 30% standard deduction on rental income—without the need for proof or bills—to the capital gains exemption that lets investors reinvest profits from any long-term asset into residential property tax-free, the system is built to reward real estate ownership. Even housing loan repayments offer twin deductions on both principal and interest from taxable salary income.
“How many other expenses can you reduce from your salary income for taxability?” Ahuja asked, pointing out that this isn’t just a loophole, it’s policy by design. But his reasoning goes beyond tax. India’s unique demographics, he explains, also make a compelling case. The average Indian household has around five members, far higher than the 2–3 seen in most developed countries. As nuclearisation grows and millions remain without homes, the pressure to double housing stock over the next few decades is enormous.
Add to this the sector’s economic footprint—real estate is India’s second-largest employer—and it becomes clear why the government would continually prioritise its growth. “Given the skill level of the masses, they will need to continue boosting the sector to create more jobs,” he said. Ahuja’s post is a rebuttal to the popular belief that India’s property market is overheated or on the verge of correction. On the contrary, he believes the real action is still ahead.
“Anyone who says India’s real estate is in a bubble can’t see what the sector will do in the next one decade,” he wrote. “It’ll be beyond anyone’s imagination.”
(This article is for general informational purposes only and does not constitute financial advice. Readers are encouraged to consult a certified financial advisor before making any investment or financial decisions. The views expressed are independent and do not reflect the official position of the India Today Group.)
Frequently Asked Questions
Is India's real estate market in a bubble?
According to investment banker Sarthak Ahuja, it is not. He argues that the sector is structurally protected and supported by government policies, demographics, and job creation.
What are the tax benefits for real estate investors in India?
Investors in real estate enjoy benefits such as a flat 30% standard deduction on rental income, capital gains exemption for reinvesting profits into residential property, and twin deductions on housing loan repayments for both principal and interest.
How does India's demographic situation impact the real estate market?
India's average household size is around five members, much larger than in developed countries. As nuclearisation grows and millions remain without homes, there is significant pressure to double the housing stock over the next few decades.
Why does the government prioritize the real estate sector?
The real estate sector is India’s second-largest employer and plays a crucial role in job creation. Given the skill level of the masses, the government will continue to boost the sector to create more jobs.
What is the future outlook for India's real estate market?
Ahuja believes that the real action in the real estate market is still ahead. He predicts that the sector will achieve significant growth over the next decade, beyond anyone's imagination.
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