Economic Survey: RERA and GST Drive Sustained Real Estate Growth and Sales

Policy reforms introduced over the last decade have fundamentally transformed India’s real estate sector. According to the Economic Survey 2025–2026, measures such as RERA, GST, and government housing initiatives have strengthened transparency, boosted buyer confidence, and triggered a sustained growth cycle in property markets across the country.

The Economic Survey highlights that these reforms have not only formalised the sector but also encouraged households to invest more in physical assets, resulting in improved housing demand and rising sales momentum since 2021.

Policy Reforms Strengthen Real Estate Foundations

The Economic Survey emphasises that landmark reforms like the Real Estate (Regulation and Development) Act (RERA), the Goods and Services Tax (GST), and the Housing for All mission have played a crucial role in reshaping the real estate ecosystem.

RERA has enhanced accountability among developers, protected homebuyers, and improved project delivery timelines. Meanwhile, GST has streamlined taxation, reduced ambiguity, and increased transparency in property transactions. Together, these reforms have contributed to a more organised and credible real estate market.

According to the Economic Survey, these structural changes have laid the foundation for long-term stability and sustainable growth in the sector.

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Demand-Side Measures Boost Housing Accessibility

Beyond regulatory reforms, the Economic Survey notes that several demand-side initiatives have strengthened housing affordability and access to finance.

Key measures include:

• Interest subsidies under PMAY (Urban)
• Affordable Housing Fund support
• Lower interest rate environment
• Simplified credit approval processes

Urban development initiatives such as the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF) have further stimulated housing demand, particularly in emerging urban centres.

The Economic Survey observes that these interventions have improved housing finance penetration and encouraged homeownership among middle-income and first-time buyers.

Post-2021 Real Estate Upcycle Gains Momentum

One of the most significant findings of the Economic Survey is the sustained real estate upcycle that began in September 2021, following the pandemic-induced slowdown.

Improved affordability conditions, easing inflation, and rising household savings have driven renewed interest in residential real estate. Buyers increasingly view property as a secure and tangible investment, contributing to stronger sales volumes.

The Economic Survey states that this upward trend has continued in recent quarters, supported by favourable economic conditions and stable credit availability.

Housing Finance Expansion Reflects Growing Demand

The Economic Survey also highlights the rapid expansion of India’s housing finance market. Outstanding individual housing loans have grown sharply over the past decade, rising from around ₹10 lakh crore in March 2015 to over ₹37 lakh crore by March 2025.

Housing loans now account for more than 11% of India’s GDP, compared to 8% a decade earlier. This reflects a deeper financialisation of housing demand and the increasing role of formal credit in real estate transactions.

According to the Economic Survey, the steady growth in housing finance indicates sustained confidence in the property market and long-term demand potential.

Real Estate’s Contribution to Economic Growth

The Economic Survey underscores the importance of the real estate sector in India’s economic landscape. Over the past decade, the “real estate and ownership of dwellings” segment has contributed nearly 7% to annual Gross Value Added (GVA) on average.

This highlights the sector’s strong linkages with construction, banking, and financial services, making it a key driver of services-led economic growth.

The Economic Survey suggests that real estate remains a critical pillar of India’s urban development and investment ecosystem.

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Rising Demand in Tier 2 and Tier 3 Cities

Another key insight from the Economic Survey is the growing role of Tier 2 and Tier 3 cities in India’s housing market. Improved infrastructure, urban development programmes, and better connectivity have expanded housing demand beyond metropolitan regions.

Government-led urban initiatives have supported real estate growth in these cities, creating new opportunities for developers and homebuyers alike.

The Economic Survey notes that decentralised urban growth could play a major role in shaping India’s future housing landscape.

Future Outlook: Structural Reforms to Drive Sustainable Growth

Looking ahead, the Economic Survey indicates that continued policy reforms, infrastructure investment, and financial sector support will be essential to maintain momentum in the real estate market.

By integrating housing policies with urban mobility, infrastructure development, and climate resilience strategies, India can ensure balanced and sustainable urban growth.

The Economic Survey suggests that a well-regulated and financially inclusive real estate ecosystem will remain central to India’s economic transformation.