Centre, States Must Promote Rental Housing, Residential Reits: NAREDCO-Maharashtra President

Real estate industry body NAREDCO-Maharashtra has asked that the Centre and state governments should bring policy initiatives to promote development of rental housing in urban centres as buying homes has become unaffordable for a large section of middle-class people.

The National Real Estate Development Council (NAREDCO) has also sought a new framework to promote residential REITs (Real Estate Investment Trusts). It also wants the strengthening of domestic financial institutions for smooth fund flow to the real estate sector that supports over 200 ancillary industries and provides huge job opportunities.

"India’s real estate sector is at an important inflection point. As the country urbanises rapidly and housing demand continues to grow, the policy framework must evolve to address affordability, rental housing, access to institutional finance and the rising cost of development," NAREDCO Maharashtra President Kamlesh Thakur said.

To discuss the issues before the sector, NAREDCO Maharashtra will host the flagship 'Real Estate & Infrastructure Investors' Summit 2026 (REIIS 2026) on September 3 in Mumbai. The event, based on the theme 'Re-defining India's Growth Story', aims to directly facilitate and promote foreign investments across Indian real estate.

Maharashtra Chief Minister Devendra Fadnavis is likely to inaugurate the summit, which will also see participation of major real estate developers and financial institutions.

Foreign investors would also attend the event. The association expects that the summit could help in attracting Rs 10,000 crore in foreign investments.

On the challenges before the sector and possible solutions, Thakur said, “Centre and state governments need to give far greater policy attention to rental housing, particularly in major urban centres where residential property prices have increased substantially over the past four to five years.” With home ownership becoming increasingly challenging for large sections of the lower and middle-income population, a robust rental housing ecosystem can play a critical role in addressing the affordability gap, he observed.

Thakur said there is a need for a well-defined policy framework, supported by appropriate incentives, to encourage the creation of quality rental housing at scale.

He said there is a compelling case for developing a suitable policy and regulatory framework for Residential REITs.

"While the country has witnessed the successful emergence of listed REITs, the segment remains largely concentrated in rent-generating commercial assets," he added.

Residential REITs can become an important catalyst for expanding India’s rental housing ecosystem, Thakur suggested.

The NAREDCO-Maharashtra President also emphasised building a stronger and more supportive financial ecosystem for its domestic real estate developers and financial institutions.

“Policy and fiscal measures that encourage domestic capital, improve access to finance and incentivise greater participation by Indian financial institutions can significantly strengthen the sector,” Thakur said.

A deeper domestic funding ecosystem will not only reduce dependence on external sources of capital but also support investment, employment generation and sustainable economic growth, he added.

"India has a unique opportunity to build a real estate ecosystem that is more efficient, transparent, financially sustainable and capable of meeting the aspirations of a rapidly urbanising population," Thakur said.

Hence, he said the focus of policy should be on increasing housing supply, improving affordability, deepening domestic capital markets, enabling access to institutional finance, encouraging rental housing and simplifying taxation and approvals.