Economic Survey: Policy reforms like RERA and GST have led to a sustained real estate upcycle and boosted sales

RERA and GST have helped formalise the real estate sector, spurred a sustained upcycle, with more household savings channelled into physical assets

Policy reforms such as the Real Estate (Regulation and Development) Act (RERA), Goods and Services Tax (GST), and the Housing for All mission have helped formalise the real estate sector. Backed by these measures, the sector entered a sustained upcycle from September 2021, reflected in improved sales driven by higher household savings being channelled into physical assets, the Economic Survey 2025-2026 said on Jan 29.

‘…policy reforms, including the implementation of the Real Estate (Regulation and Development) Act (RERA), GST, and the Housing for All mission, have supported greater formalisation of the sector. Demand-side measures, such as interest subvention under PMAY (Urban), the Affordable Housing Fund, lower interest rates, and streamlined credit processes, have further strengthened access to housing finance. Urban initiatives, such as the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF), have supported housing demand in Tier 2 and Tier 3 cities,” the Economic Survey 2025-2026 has said.

“Backed by these reforms, the sector entered a sustained upcycle from September 2021, post-COVID, as reflected in improved sales, driven by higher household savings channelled towards physical assets. The momentum has continued in recent quarters, supported by favourable affordability conditions and easing inflation,” it said.

On average, housing volume sales continue to remain higher compared to FY22-FY24. Housing finance also expanded steadily, with outstanding individual housing loans more than tripling from about ₹10 lakh crore as at the end of March 2015 to over ₹37 lakh crore at end March 202540, raising housing loans from 8.0 per cent to over 11 per cent of GDP, indicating a deeper financialisation of housing demand, it said.

It also noted that the ‘real estate and ownership of dwellings’ sector has contributed about 7 per cent to annual GVA, on average, over the past decade, highlighting its importance in services-led growth and strong linkages with construction and financial services.

Gross Value Added (GVA) is a measure of the value created by a sector or economy.