Budget 2025: Real estate experts eye reforms, affordable housing and growth boost

The real estate sector, which plays a critical role in the Indian economy, has been facing various challenges, including liquidity issues, regulatory hurdles, and fluctuating demand in the residential and commercial segments

As India gears up for the Union Budget, real estate experts are closely analysing potential policy changes and initiatives that could shape the future of the industry. The real estate sector, which plays a critical role in the Indian economy, has been facing various challenges, including liquidity issues, regulatory hurdles, and fluctuating demand in the residential and commercial segments. However, experts remain optimistic that the Budget 2025 could bring forward measures that will boost growth, streamline processes, and foster long-term stability.

Here’s a closer look at the expectations and insights from leading real estate experts:

1.    Focus on affordable housing

Affordable housing has been a priority area in recent budgets, and real estate experts expect this to continue in 2025. With a rising urban population and increasing demand for budget-friendly housing, experts believe there is a need for more incentives for developers and homebuyers alike. 

"India's real estate sector is poised for significant growth, with projections indicating it will exceed USD 4.8 trillion by 2047, contributing 18 per cent to the projected USD 26 trillion GDP, according to a joint report by EY and CREDAI," Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra, said. 

"In 2024, the sector showcased remarkable growth, with Mumbai alone experiencing an 11 per cent increase in housing sales, underscoring its immense potential and crucial role in the economic progress.  Looking at the ongoing development, we expect Budget 2025 to introduce measures that will further strengthen the real estate industry. Increasing tax slabs, particularly for individuals earning Rs 12-15 lakh annually, will enable more citizens to invest in homeownership. Additionally, revising tax regulations for developers and stabilising raw material prices will help manage construction costs and maintain housing affordability. These initiatives will not only boost the real estate sector but also contribute to India’s broader economic and housing goals, fostering sustainable growth nationwide," Yagnik said. 

Dhiren Tharwani, Director - Tharwani Realty, said, "We believe that the government will make affordable housing the focus as we enter Budget 2025, especially in micro-markets. Apart from pushing developers, tax exemptions, ease of approvals, and more infrastructure spending will help them build efficient, sustainable housing alternatives. Regulatory barriers, input costs, and land availability must all be addressed to speed up development in micro markets.  Affordable housing promotes economic inclusion and community development in addition to real estate. By granting house ownership to millions of Indians across the nation, the government can close the housing gap and promote employment growth." 

Aksha Kamboj, Executive Chairperson of Aspect Global Ventures Pvt. Ltd., said, "As the upcoming Union Budget approaches, we in the real estate sector are optimistic about reforms that will further catalyse growth and innovation in this vital industry. The government's commitment to infrastructure development has already laid a strong foundation, and we hope this momentum continues with additional incentives for affordable housing, single-window clearances for projects, and rationalisation of GST rates to benefit both developers and homebuyers."

2.    Streamlining of tax reforms

The real estate sector is often burdened with complex and time-consuming regulatory approvals. Experts are expecting the government to introduce measures to simplify the approval process, making it easier for developers to bring projects to market faster.

Dharmendra Raichura, VP & Head of Finance at Ashar Group, said, "India’s economy is set for robust growth, with the GDP projected to expand by 6.4% in the fiscal year 2025 -2026. This growth is expected to benefit various sectors, including real estate. The sector is particularly hopeful for an increase in the proposed home loan interest tax exemption limit, with the cap potentially rising from Rs 2 lakh to Rs 5 lakh. This would offer substantial relief to middle-income homebuyers, encouraging more investments in homes and boosting the housing sector."

"We expect the upcoming Budget 2025 to focus on infrastructure development, tax reforms, and making homeownership more accessible, thus boosting the sector performance even further in the coming financial year. Proposals such as easing GST and stabilising raw material prices will help reduce construction costs and make housing more affordable. These measures will address sector challenges and play a pivotal role in India’s economic progress, with real estate continuing to be a key driver in its growth," he added.

3.    Tax structure reforms

Experts anticipate the Budget 2025 to introduce a few tax structure reforms.

Vishal Jumani, Joint-Managing Director of Supreme Universal, said, "We anticipate the Union Budget 2025 to introduce significant measures that will align with the current transformation of the real estate sector and enable the industry to achieve its projected growth of becoming a USD 1 trillion market by 2030. Revisiting the definition of affordable housing, by reviewing and increasing the Rs 45 lakh cap, especially in urban India to match the current market sentiment and inflation will be key to achieving this mammoth economic vision in the next 5 years.”

"Further tax structure reforms, reduction in GST and enhanced accessibility to housing finance can create a sustained upward momentum for the real estate industry. Specifically, Tax incentives for green and sustainable practices along with the easing of input tax credits and favourable policies that will reduce the burden of the construction cost will motivate the developers to innovate and transition to a more future-ready approach, thus aligning the sector as one of the key contributors to the country’s overall economic vision and goals," he added.

4.    Incentives for green and sustainable real estate

With growing awareness around climate change, sustainability in real estate is becoming a focal point. Experts anticipate the Budget 2025 to introduce incentives for developers adopting green building practices and eco-friendly technologies.

Pavan Kumar, Founder & CEO - White Lotus Group, said, "The Union Budget 2025 presents an opportunity to further strengthen the real estate sector's contributions towards India’s GDP by 2025. The sector is undergoing a transformative phase, driven by technological advancements, consumer preferences for sustainable living, and government reforms. A focus on incentivizing green housing and sustainable developments will encourage eco-conscious practices, ensuring India aligns with global sustainability benchmarks. Simplifying approval processes through single-window systems and facilitating access to affordable financing can enhance efficiency and enable the timely completion of projects. Additionally, revisiting GST rates on under-construction properties will drive demand, especially in high-end and luxury housing segments."

"The sector’s resilience and adaptability make it a key driver of India’s economic growth. With targeted support in the budget, real estate can elevate urban living standards, attract global investments, and set new benchmarks for innovation and sustainability. These measures will not only enhance the sector's growth but also contribute significantly to India’s goal of becoming a USD 1 trillion real estate market by 2030,” Kumar said.

5.    Reviving commercial real estate

The commercial real estate sector, especially the office space segment, was severely impacted by the Covid-19 pandemic. As hybrid and remote work models continue to evolve, experts are hoping the Budget 2025 will address the needs of this segment with measures that stimulate demand for commercial spaces.

Ashish Bhutani, CEO - Bhutani Infra, said, "The Union Budget 2025 will be a game-changer for India’s real estate sector, especially in bustling regions of Uttar Pradesh. Areas like Noida are seeing a surge in demand for commercial spaces."

"One major improvement could be introducing single-window clearance systems to fast-track project approvals. It’s a simple step that could save time and cut delays for commercial real estate projects. Another big opportunity lies in making it easier for foreign investors to invest in mixed-use and Grade-A office spaces. Tax breaks for green buildings and smart urban projects can attract global investors and elevate the region’s status as a commercial hub. With strategic government support, real estate can boost job creation and contribute to India’s USD 5 trillion economy vision," Bhutani added.

Conclusion:

As Budget 2025 approaches, real estate experts are looking for measures that will provide a much-needed boost to the sector. From affordable housing and regulatory reforms to sustainable practices and infrastructure development, the industry anticipates that the budget will pave the way for growth and stability. If the right steps are taken, India’s real estate sector can remain a key driver of economic progress in the years to come. 

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