The Indian government treats real estate as its preferred investment: The real estate market in India has no risk of crashing, Sarthak Ahuja an investment banker provided solid evidence against the belief that India faces a housing market bubble that will soon collapse. The housing sector maintains its status as the government’s “favourite child” because of its solid backing from both structural elements and policy measures which ensure its stability.
Fiscal Engines Fuel the Market
Ahuja identifies three important fiscal tools that differentiate real estate investments from other possible investments.
1. The rental income tax deduction stands at 30% for landlords
The unique benefit of this sector allows landlords to subtract rental income expenses by 30% without requiring documentation proof which exceeds all other investment options.
2. Capital gains reinvestment exemption
Investors who sell stocks gold or mutual funds can redirect their gains into residential property to evade paying long-term capital gains tax. Wealthy people redirect their financial resources into real estate because of this opportunity.
3. Home-loan interest & principal deductions
The tax benefits for salaried homebuyers include both interest and principal loan repayments which can be used to reduce their taxable income.
Ahuja effectively asks whether any other expense exists for salary income tax reduction. The clear, unspoken answer: none
Demographics: A Driving Force
The demographic structure of India maintains housing demand through its various influences. The average Indian household contains approximately five people which surpasses developed nations where families typically consist of two to three members thus creating massive home demand.
The government needs to enhance its house supply by a substantial amount because of the growing population according to Ahuja. The government must increase housing supply by almost double the current level for both small and large families as well as homeless populations. India needs real estate investment as a mandatory growth component because the country must provide housing for its extensive population.
Employment: A Foundation of Support
Real estate extends beyond physical structures since it stands as India’s second major employment sector. The sector employs workers with low to mid-level skills throughout construction, materials production, marketing, legal services and financial operations.
Ahuja explains that the relationship between real estate and employment opportunities is too profound for policymakers who understand that sector deterioration would result in mass unemployment. The fundamental characteristics of the Indian real estate market have persisted for ten years which makes the bubble claim inaccurate.
He states bluntly: “Anyone who says India’s real estate is in a bubble… can’t see what the sector will do in the next one decade.”
Summing It Up
| Supporting Factor | Explanation |
| Tax breaks | Top tier incentives: rental deductions, capital gain exemptions via reinvestment, home loan write offs |
| Demographic demand | Large families ensure sustained housing need |
| Employment creation | Real estate drives jobs and political prioritization |
| Policy momentum | The government treats real estate as its “favourite child” |
The combined elements within this system exist to develop rather than deflate the Indian housing market. The sector remains resistant to market fluctuations because it reacts more strongly to fundamental factors and policy decisions than to market speculations.
According to Ahuja real estate in India represents a solid structural foundation for national development rather than a speculative bubble. The market will inevitably experience periods of consolidation or cooling but a collapse comparable to 2008 will not occur. Real estate maintains its path toward unbroken expansion because policy incentives work together with demographic advantages and employment responsibilities to support its growth throughout the coming years.
