Is India’s real estate market in a bubble? Not even close, says investment banker Sarthak Ahuja. In a LinkedIn post, Ahuja argues that the sector isn’t just growing, it’s structurally protected and relentlessly supported by policy. Why? Because real estate, he says, is the Indian government’s “favourite baby.”
“They will always keep making policy for its growth compared to all other children,” he wrote, using a metaphor to highlight the long-standing tilt in favour of the housing market over other asset classes.
At the heart of Ahuja’s argument is taxation. No other investment avenue, he says, enjoys the kind of fiscal privileges that real estate does. From a flat 30% standard deduction on rental income—without the need for proof or bills—to the capital gains exemption that lets investors reinvest profits from any long-term asset into residential property tax-free, the system is built to reward real estate ownership. Even housing loan repayments offer twin deductions on both principal and interest from taxable salary income.
“How many other expenses can you reduce from your salary income for taxability?” Ahuja asked, pointing out that this isn’t just a loophole, it’s policy by design.
But his reasoning goes beyond tax. India’s unique demographics, he explains, also make a compelling case. The average Indian household has around five members, far higher than the 2–3 seen in most developed countries. As nuclearisation grows and millions remain without homes, the pressure to double housing stock over the next few decades is enormous.
Add to this the sector’s economic footprint—real estate is India’s second-largest employer—and it becomes clear why the government would continually prioritise its growth. “Given the skill level of the masses, they will need to continue boosting the sector to create more jobs,” he said.
Ahuja’s post is a rebuttal to the popular belief that India’s property market is overheated or on the verge of correction. On the contrary, he believes the real action is still ahead.
“Anyone who says India’s real estate is in a bubble can’t see what the sector will do in the next one decade,” he wrote. “It’ll be beyond anyone’s imagination.”
(This article is for general informational purposes only and does not constitute financial advice. Readers are encouraged to consult a certified financial advisor before making any investment or financial decisions. The views expressed are independent and do not reflect the official position of the India Today Group.)
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