Budget 2025 and Its Impact on Property Prices in Mumbai: A Puneet Urban Spaces Perspective

A budget is more than just numbers—it’s a blueprint for economic stability and future growth. Union Budget 2025 reflects this vision by reinforcing long-term development strategies while addressing key economic sectors. While certain industries received direct policy benefits, others, including real estate, stand to gain from broader economic momentum. Given that the sector contributes 7% to India’s GDP, the continued surge in residential and commercial demand is a testament to its resilience. With India targeting a USD 7 trillion economy, real estate is poised to play a crucial role in achieving this milestone.

So, how will this year’s budget influence Mumbai’s property market? Let’s explore key takeaways that could impact property prices in the city.

Tax Rationalisation and Its Effect on Housing Demand

One of the significant highlights of Budget 2025 is tax rationalisation. The reduction in income tax rates is expected to increase disposable income, thereby improving purchasing power. This could encourage more aspiring homeowners, especially young professionals, to invest in Mumbai’s real estate market. Additionally, the rise in the annual TDS limit on rental income from INR 2.4 lakh to INR 6 lakh reduces compliance burdens, which could boost Mumbai’s rental market and attract more property investors.

Affordable Housing Gets a Boost

Addressing a crucial segment of real estate, the government has introduced a second Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, with an allocation of INR 15,000 crore. This move aims to resolve financial bottlenecks that delay project completions, ultimately benefiting homebuyers awaiting possession. In Mumbai, where affordability is a challenge, this initiative could provide much-needed relief and help revive stalled projects, ensuring continued market confidence.

Infrastructure Expansion to Strengthen Real Estate Growth

A robust infrastructure push continues to be a cornerstone of the budget. The estimated capital expenditure for FY26 stands at INR 15.5 lakh crore, which is set to have a multiplier effect on real estate and construction. A three-year PPP project pipeline for infrastructure development will accelerate key projects, enhancing connectivity and livability across Mumbai. Furthermore, INR 1.5 lakh crore in 50-year interest-free loans to states will facilitate regional growth, potentially unlocking new real estate hubs in and around the city. The INR 1 lakh crore Urban Challenge Fund is another notable initiative aimed at incentivizing cities to raise funds through municipal bonds and PPPs, which could fuel infrastructure-led urban transformation in Mumbai.

Impact of GCC Expansion on Commercial Real Estate

A major highlight of Budget 2025 is the government’s focus on Global Capability Centres (GCCs). With around 1,700 GCCs currently operational and an expected increase to 2,100 by 2030, the demand for premium office spaces in Mumbai is set to rise. This could lead to higher commercial property values in business districts, further reinforcing Mumbai’s status as a financial and corporate hub.

Hospitality Sector Gains Momentum

Recognizing the potential of the hospitality industry, the budget introduces measures such as enhanced e-visa facilities and improved travel connectivity. The expansion of MUDRA loans to support homestay businesses, along with the development of 50 tourism destinations, is expected to drive tourism-related real estate demand. Given Mumbai’s prominence in India’s hospitality landscape, this could spur increased investments in hotels, serviced apartments, and mixed-use developments.

Union Budget 2025 takes a balanced and forward-looking approach, ensuring steady economic momentum. While key real estate-specific demands, such as a revision of the affordable housing cap and higher home loan interest deductions, remain unaddressed, the broader policy measures create a favorable environment for growth. With continued infrastructure development, investment inflows, and rising urban demand, property prices in Mumbai are expected to see steady appreciation. As a trusted name in Mumbai’s real estate market, Puneet Urban Spaces remains committed to delivering value-driven, future-ready developments that align with these evolving trends.

The road ahead looks promising, and as the city transforms, so do the opportunities in Mumbai’s real estate sector.