Summary of this article
CREDAI flags Budget 2026 missed housing reforms.
Wants higher affordable housing price cap.
Seeks credit guarantee for homebuyers.
India’s real estate sector had entered Budget 2026 with great expectations, especially with the hopes that it could revive and expand the affordable housing segment. However, the Confederation of Real Estate Developers’ Associations of India (CREDAI) believes that the sector's actual demands were not addressed properly. CREDAI President Shekhar Patel addressed this and has emphasised that the developers’ body will continue improving with the government’s push for policy reforms, particularly with new definitions of affordable housing.
Budget Hopes and Unmet Expectations
As per Patel, the real estate industry is expected to have a stronger policy support in 2026, especially for segments like affordable housing and peripheral growth sectors, both of which remain a major driver of housing demand in India. CREDAI plans to continue resolving long-standing issues that strongly affect this segment. Affordable housing has been the developmental cornerstone for years in India, yet developers argue that the existing framework has not kept pace with inflation, rising land prices, and increasing construction costs.
Why the Affordable Housing Definition Needs Change
One of the primary demands by CREDAI is the removal of the price capping of Rs 45 lakh under the definition of affordable housing. Introduced in 2017, the definition limits home sizes to 60 sq meters in metro cities. Whereas, homes priced below Rs 45 lakh attract a GST of 1 per cent rate compared to 5 per cent for higher priced units. Patel argued that a fixed cap on pricing no longer reflects the market realities. With inflation rising annually, homes that were once within the affordable bracket are now beyond the threshold.
CREDAI has suggested raising the cap to Rs 65-70 lakh, as it would offer some temporary relief. This revision to the capping would also mean that, in some cases, inflation would outdate the new numbers as well.
Proposal for a Credit Guarantee Scheme
Another key demand is the introduction of a credit guarantee scheme for affordable housing buyers, which is similar to the schemes available for micro, small, and medium enterprises MSMEs. CREDAI president emphasised how many middle and lower middle-class buyers struggle to secure adequate housing loans as their income documentation does not meet the strict banking requirements. As a result, they often turn to their private financers or NBFCs, where interest rates hike up to 14 to 15 per cent. A government-backed guarantee scheme could reduce the lending risks for banks and improve access for people to formal housing.
Declining Share of Affordable Housing
CREDAI also raised its concerns about the shrinking share of affordable housing in the country. In 2022, the segment accounted for nearly 50 per cent of housing supply and demand, whereas the share of this percentage had fallen by 18 per cent last year. This can be credited to the rigid definition and rising costs.
The real estate sector remains optimistic despite how the Budget 2026 overlooked the sector. Continued push for redefining affordable housing and improving credit access by CREDAI reflects the industry’s outlook for the future.
