As expectations build around the Union Budget 2026, the real estate sector is seeking policy continuity and targeted reforms to sustain its recent momentum and address long-standing structural challenges. Industry leaders believe that with the right mix of demand-side incentives, regulatory easing, and a strong infrastructure push, real estate can play an even more significant role in India’s economic growth story. The sector has demonstrated notable resilience in recent years, supported by steady demand, evolving buyer aspirations, and government-led initiatives. However, affordability continues to remain a key hurdle for a large segment of homebuyers. Expanding the definition of affordable housing in urban areas is widely seen as a move that could significantly boost end-user demand, particularly as residential real estate continues to be viewed as a long-term investment option. There is also a strong call for interest subsidies for first-time homebuyers who currently fall outside existing benefit frameworks, along with an increase in the home loan interest deduction limit to further encourage housing purchases. From a developer’s perspective, faster project approvals and rationalisation of GST on under-construction homes are considered crucial to reducing delays and improving execution efficiency. Granting industry status to real estate is another widely supported measure, as it could unlock access to more affordable financing and help streamline regulatory processes. Continued investment in infrastructure is also expected to support housing demand across regions. A growth-oriented Budget, stakeholders believe, could have multiplier effects across nearly 250 allied industries, driving employment and broader economic activity. Echoing the need for stability and long-term planning, industry voices stress the importance of consistent taxation policies, expanded access to institutional financing, and simplified regulations, particularly for luxury and branded residential segments. Sustained investment in urban infrastructure, mass mobility, and integrated city planning is seen as essential, given that connectivity and civic amenities directly influence the attractiveness of premium developments. Measures that promote formalisation and reduce compliance burdens are also expected to help the sector mature further and strengthen investor confidence. Institutional capital has emerged as another key theme ahead of the Budget. Strengthening demand-side support in established urban markets, alongside continued investments in urban transport and last-mile connectivity, is considered critical. There is also growing advocacy for enhanced incentives to encourage greater institutional participation in real estate, making investments more regulated, transparent, and scalable. Such a calibrated and forward-looking approach is expected to reinforce confidence across the value chain and further establish real estate as a key contributor to employment generation, capital formation, and India’s urban development journey.

Starting January 1, 2026, a significant update will be implemented concerning real estate law in Tamil Nadu. This update pertains to the enforcement of a three-bank-account structure for real estate projects. The change aims to strengthen monitoring of homebuyers’ funds and prevent misuse of money for unrelated projects. As per the latest circular, builders are required to establish three specific bank accounts within a single scheduled bank and branch for each real estate project. The details of these accounts must be furnished at the time of applying for project registration.

The three mandated accounts are:

A. Designated Collection Account (100%)
B. Designated Separate Account (70%)
C. Designated Transaction Account (30%)

Under this mechanism, all homebuyer payments are first deposited into the collection account (100%). From this account, the bank automatically transfers 70% of the amount to the separate account earmarked exclusively for land and construction expenses. Funds in the separate account (70%) can be accessed by the builder only upon submission of the required certificates issued by the architect, engineer, and chartered accountant, as prescribed under the applicable regulations. These certificates must also be uploaded to the regulatory authority’s online portal. The transaction account (30%) will hold funds contributed by the builder that do not originate from homebuyers. This account may be used for expenses such as refunds (limited to a maximum of 30% of the total refund amount), compensation, interest on refunds or compensation, marketing expenses, loan repayment including interest, administrative and overhead costs, and penalties, if any. Builders are required to redesign their project-level banking operations by opening all three mandated accounts in the same bank and branch, with an automated same-day sweep mechanism to eliminate manual control at the collection stage. All customer payment channels must be aligned to route funds only through the designated collection account; failure to do so will render the receipt non-compliant. In joint development projects, landowners must be contractually bound to the same three-account structure before any revenue share is released. Existing project loans must be disclosed and ring-fenced, ensuring that loan servicing occurs only through the permitted transaction account. Going forward, withdrawals and refunds must be planned strictly around certified construction milestones, as inter-project fund movement will no longer be legally or technologically permissible.

A senior Union government official on Wednesday inaugurated and laid foundation stones for port infrastructure projects worth about ?2.19 billion at two major ports in Chennai, aimed at strengthening coastal protection, safety systems, healthcare facilities and digital operations. At one port, four projects with a combined investment of over ?1.29 billion were inaugurated. These included the strengthening of nearly 850 metres of the eastern breakwater, with the revetment upgraded through redesigned slopes and tetrapod armouring to improve protection against storms and cyclones. A new firefighting pump house was commissioned in oil dock areas to enhance emergency preparedness in hazardous zones. The port also inaugurated the modernisation of its hospital, upgrading it into a 125-bed facility spread across around 127,000 square feet, with improved wards, operation theatres, diagnostic facilities and enhanced safety systems. Another project involved the launch of an integrated enterprise-level digital platform designed to reduce paperwork, cut delays and improve turnaround time for port users by streamlining operations. At the second port, foundation stones were laid for two infrastructure projects and an electronic port clearance portal was launched to enable online clearances for shipping lines and agents. One project involves a ?0.014 billion northern access road connectivity initiative, including the realignment of a 360-metre stretch of the port’s boundary wall to facilitate faster cargo evacuation. The port has also completed the rehabilitation of a 202-metre damaged section of its northern breakwater at a cost of ?1.05 billion, using heavy tetrapods and rock armouring based on advanced engineering designs. Officials said the projects would strengthen port resilience, improve safety and accelerate operations, contributing to lower logistics costs and more efficient cargo movement. Together, the two ports crossed 100 million tonnes of cargo handling in 2025 for the first time. One port handles about 1.8 million standard shipping containers annually, while the other handled 48.41 million tonnes of bulk and liquid cargo last year, with utilisation exceeding 80 per cent of its capacity.

The state government on Tuesday unveiled a five-year warehousing policy aimed at easing logistics bottlenecks and supporting its ambition to build a $1 trillion state economy by 2030. The policy focuses on expanding warehousing infrastructure beyond established industrial hubs into delta regions, Category C districts, and Tier II and Tier III cities. Under the policy, projects in delta and Category C districts will be eligible for a 25% fixed capital subsidy, capped at ?2 crore and disbursed over three years, provided they meet minimum capacity requirements. Land in state-run industrial parks will be offered at half the standard rate, while large facilities of at least 1 million sq ft on government land will receive a five-year exemption from electricity tax. Additional incentives will be available for green features such as rooftop solar and certified sustainable construction. It identifies six priority areas: greenfield warehousing in industrial parks, brownfield expansion of existing facilities, public-private partnerships through land allocation, adoption of sustainable and smart technologies, development of commodity-specific silos and cold chains, and ease-of-doing-business reforms aligned with the state’s logistics policy. The policy underscores the growing importance of storage and distribution to the state’s manufacturing-led growth strategy. The state, which contributes about 9.2% to India’s GDP despite accounting for just 4% of its landmass, is targeting a $250 billion manufacturing output by the end of the decade. Officials say the Warehousing Policy 2026 is designed to address sharp regional imbalances in storage infrastructure while consolidating established logistics hubs. At present, demand is heavily concentrated around the capital city, which absorbed around 5 million sq ft of Grade-A warehousing space in 2024, led by third-party logistics providers, manufacturing firms, and e-commerce companies. Another major city followed with about 1.5 million sq ft, driven largely by retail supply chains, while an industrial town has emerged as a key node for the automotive and electronics ecosystem. By contrast, delta districts and several Category C regions remain under-served, despite strong bases in foodgrains, agro-processing, fisheries, and small-scale manufacturing. Limited access to cold storage and commodity-specific warehousing has constrained value addition, increased post-harvest losses, and weakened supply-chain resilience in these regions. Government-owned warehousing capacity in the state currently exceeds 1.5 million tonnes, supplemented by around 135 private cold storage facilities with an estimated 0.2 million tonnes of capacity. However, the report acknowledges that the geographical spread of this infrastructure remains uneven.

Model houses have been set up for families to be relocated from 13 villages in Kancheepuram district as part of the resettlement plan for the proposed greenfield airport at Parandur. The authorities have constructed multiple model houses of similar size (400 sq ft) but with different design options near the primary health centre in Parandur. Villagers are encouraged to visit these houses and select a design of their choice.

An audio-visual presentation has also been prepared and will be played inside the model houses. This presentation explains the amenities that will be available in the proposed townships, including access to schools, hospitals, and other essential facilities. It also details the relief and compensation packages offered to families who give up their houses and land for the airport project.

The overall master plan for the resettlement townships was prepared with assistance from a consultancy firm. In June last year, the state government announced a relief package for farmers and residents of the 13 affected villages. Under this package, compensation ranging from ?35 lakh to ?60 lakh per acre has been offered for agricultural land.

In addition to compensation for the structural value of existing houses, affected families will be provided with an alternative housing site equivalent to five to ten per cent of their original landholding, along with a newly constructed 400 sq ft house. Alternatively, families may choose to receive ?8 lakh in cash instead of the house.

Economically backward families who have been living along roadsides and canal banks in North Chennai will soon be relocated to a large-scale housing complex developed by a metropolitan planning agency. The project, comprising 776 housing units, is scheduled to be opened on January 21. The housing complex is located close to a major government hospital and has been designed as a comprehensive residential development with education, health, and community-support facilities. It consists of two residential blocks with ground-plus-nine floors, each accommodating 388 homes. Five per cent of the units have been exclusively reserved for persons with disabilities to ensure inclusive living. Each dwelling is a one-bedroom apartment with a built-up area of approximately 420 square feet. Unlike earlier resettlement projects that focused largely on providing basic shelter, this development places strong emphasis on quality construction, improved amenities, and long-term durability. The design and finishes are intended to be comparable to private apartment complexes, marking a shift away from minimum-standard housing towards sustainable urban living. The project reflects a planning approach that prioritises long-term livability. From the initial planning stage, the focus has been on creating a safe, comfortable, and well-connected residential environment rather than merely providing shelter. The complex features a spacious central courtyard paved with interlocking blocks, landscaped parks, outdoor gym equipment, children’s play areas, modern gazebos, and ample seating arrangements for senior citizens, all of which are intended to promote community interaction and healthy living. In addition, essential facilities such as a childcare centre, a public distribution outlet, and an indoor gymnasium have been incorporated within the campus to support daily needs. Overall, the project represents a significant step towards improving housing standards for economically weaker families, while fostering a dignified and community-oriented living environment.

South and West Chennai are expected to emerge as the city’s key residential growth drivers in 2026, supported by improved road infrastructure, expanding metro rail connectivity, and proximity to major employment hubs, according to a recent study. The report noted that infrastructure developments such as the Kuthambakkam bus terminus and the upcoming Metro Rail Corridor 4 have already sparked increased residential interest in the western suburbs.

Strong housing sales have been recorded across South and West Chennai, particularly along the Old Mahabalipuram Road, Grand Southern Trunk Road, Porur–Poonamallee Road, and emerging western suburban micro-markets. Factors such as anticipated repo rate cuts, rationalisation of taxes on select construction materials, and supportive policy measures are expected to enhance affordability and strengthen buyer sentiment in 2026, especially within the affordable housing segment.

The study expects South and West Chennai to remain the city’s primary residential growth corridors in 2026, driven by metro rail expansion, improved road connectivity, and closeness to major employment centres. Despite broader economic uncertainties, residential property prices have witnessed only marginal adjustments, highlighting the stability and resilience of Chennai’s housing market.

A Chennai-based EPC and industrial park developer has raised around ?400 crore through a preferential issue. The fundraising was structured through a combination of equity and warrants issued to domestic institutions and foreign portfolio investors (FPIs). The company plans to enter real estate promotion and development in a significant way, positioning it as a new business vertical and a logical extension of its existing EPC operations. As part of its real estate strategy, the company will focus on residential, commercial, and IT/ITeS segments. It plans geographic expansion and market development across Tamil Nadu initially, before expanding into other states and regions. According to the company, the macroeconomic environment presents compelling opportunities in Chennai and Tamil Nadu, supported by robust growth and evolving workforce patterns. The strategy will focus on pursuing value-creating opportunities in asset classes and markets where demand and supply dynamics are well understood. The preferential issue is expected to accelerate the next phase of growth while preserving investor value. A portion of the funds raised will also be used to consolidate land parcels at Sunguvarchathriam, near the Oragadam industrial hub and close to the proposed new greenfield airport. The company currently holds around 400 acres in this location and plans to roll out a master development plan for these lands by the second quarter of FY27, according to official notes.

Surpassing the long-standing dominance of the IT sector, Global Capability Centres (GCCs) have emerged as the primary growth engine of Chennai’s commercial real estate market in 2025. GCCs accounted for 51% of the city’s total gross office space leasing, overtaking all other sectors and compensating for a visible slowdown in demand from traditional IT and IT-enabled services. Out of the 8.4 million sq ft of gross office leasing recorded during the year, GCCs alone absorbed 4.3 million sq ft, underlining their growing strategic importance in the city’s office ecosystem. This performance placed Chennai well ahead of the national trend, where GCCs contributed 41% of total office absorption across India, an increase from 36% in the previous year. Office space absorption continues to act as a reliable indicator of sectoral expansion, with data pointing to a sustained upward trajectory. GCC-related leasing witnessed consistent growth, rising from 2.0 million sq ft (27% share) of the 7.4 million sq ft leased in 2023, to 3.29 million sq ft (41% share) of the 8.1 million sq ft leased in 2024, before crossing the halfway mark in 2025. The Chennai office market experienced a notable sectoral realignment during 2025, reflecting broader economic shifts and evolving industry dynamics. As GCC activity accelerated, supply conditions tightened. New office completions stood at 3.9 million sq ft, while net office absorption reached 5.6 million sq ft, indicating demand significantly outpaced supply. This translated into a 12% year-on-year growth in absorption, exceeding the 10% average growth recorded across India’s top seven office markets. Chennai also stood out as the only major metropolitan market with single-digit vacancy levels, with vacancy rates declining from 9.2% to 8.8% during the year. The tightening market conditions contributed to upward pressure on rents, with average monthly office rentals rising by 5% year-on-year to nearly ?79 per sq ft. Looking ahead, market indicators suggest that Chennai’s office sector is poised to maintain positive momentum through 2026, supported by sustained demand from GCCs. Beyond the metropolitan region, Coimbatore has emerged as a leading Tier-II city for GCC expansion, benefiting from improved infrastructure, talent availability, and cost advantages. While Chennai and Mumbai continue to function as key data centre hubs in the country, Coimbatore and Madurai are increasingly gaining traction as emerging data centre destinations, further strengthening Tamil Nadu’s position as a diversified commercial and digital infrastructure hub.

The average interest rate charged on newly issued rupee-denominated loans across the banking system increased toward the end of November 2025. The rate rose by 10 basis points, moving from 8.61% in October to 8.71% in November, indicating a gradual tightening of borrowing conditions for new loans. This increase was mainly driven by public sector banks, which raised their lending rates more aggressively during the month. Their average rate on new loans climbed by 16 basis points, reaching 8.05% by the end of November. This suggests that these banks adjusted their pricing in response to higher funding costs, policy transmission, or efforts to protect profit margins. In contrast, private sector banks kept their lending rates unchanged during the same period. Their average rate remained relatively high at 9.44%, indicating that they had already priced in earlier cost pressures or chose to maintain stable rates to remain competitive and support loan demand. Meanwhile, overseas banks operating in the domestic market moved in the opposite direction. Their average lending rate declined by 6 basis points, falling from 8.24% in October to 8.18% in November. This reduction may reflect differences in funding structures, risk appetite, or a strategic move to attract borrowers in a competitive lending environment. Overall, the data shows that the rise in system-wide lending rates during November was uneven across bank categories, with public sector banks being the primary contributors to the increase, private banks holding rates steady, and overseas banks slightly easing borrowing costs. This mixed trend highlights differing strategies and cost conditions within the banking system, even as the general direction of lending rates edged upward.

Encroachments have turned the main road leading to the VGP layout, a residential locality in Uthandi, into a congested stretch, especially on weekends. Makeshift eateries, coffee shops, and other commercial outlets operating along the road and adjoining service lane are responsible for the situation.

Following repeated complaints from residents, a survey of the land and shops was conducted last week by local revenue authorities. Most of the shops were found to have illegally extended onto the roads, blocking footpaths. The survey work is nearing completion, and the report is expected to be submitted to the civic body shortly.

A visit to the area revealed banners erected dangerously close to the roadway, with footpaths completely taken over. Some eateries had placed chairs for customers outside their premises, encroaching upon road space near the service lane.

Residents stated that a portion of the encroached land belongs to a road development agency. They also pointed out that illegal extensions force visitors to park vehicles on the roads, further worsening traffic congestion.

Civic authorities have stated that action will be taken after reviewing the survey report. The nature of the action will depend on the severity of the violations, with minor encroachments such as banners likely to be addressed through removal after discussions.

As India entered 2026, the real estate sector is positioned for measured yet sustainable growth across all major segments, industry experts said on Friday. Strong fundamentals, expanding premium housing demand, and adaptive retail and logistics ecosystems are expected to continue attracting both domestic and international capital. While 2025 presented several macroeconomic and geopolitical challenges, 2026 is anticipated to be a year of recalibration and renewed economic momentum. This outlook is supported by India’s strong GDP growth of 8.2 per cent in Q2 FY26, recorded despite global uncertainties and shifting trade dynamics. With this growth rate, the country remains firmly on track to become the world’s third-largest economy by 2030, with an estimated GDP of $7.3 trillion. To reinforce economic development, the government implemented a mix of fiscal and monetary measures. Fiscal initiatives included the rationalisation of GST rates and revisions in income tax slabs. On the monetary front, the central bank reduced the repo rate to 5.25 per cent and maintained a neutral policy stance, a move expected to support economic activity in 2026. Overall, the year is poised to witness holistic sectoral growth, strengthened real estate activity, and improved investor sentiment. The office market is projected to maintain its upward trajectory in 2026, with gross absorption expected to reach 75–80 million square feet, driven largely by sustained expansion from global capability centres. The IT–ITeS and BFSI sectors are expected to remain key contributors. Flexible workspace operators are also likely to consolidate their presence as occupiers prioritise agility and hybrid workplace models. Leasing activity is expected to be led by Bengaluru, Chennai, and Hyderabad, with Mumbai and Pune likely to record an increased share. The year 2025 has been described as a landmark period for India’s real estate sector, marked by significant policy reforms, robust demand across asset classes, and a renewed focus on sustainable urbanisation. Looking ahead, Tier-II and Tier-III cities are expected to play a larger role in the sector’s growth in 2026, supported by improved connectivity, rising employment opportunities, and emerging industrial corridors. The outlook for fiscal 2027 is also optimistic, with demand recovery driven by rising incomes, lower interest rates, and continued infrastructure development. Commercial real estate is projected to sustain its growth momentum, with demand expected to rise by 5–7 per cent and supply by 9–11 per cent, supported by strong leasing activity from global capability centres, flexible workspace operators, and the IT/ITeS and BFSI sectors.