The real estate sector generally tends to ‘slow’ down during the general elections, there are few launches and investors opt for a ‘wait and watch’ approach. Having said that, the end-users may not be directly impacted as they may decide to purchase a house as and when they find the right project in the market and the best deal that suits their pocket.Real estate investors tend to become cautious when there is uncertainty surrounding election results and they anticipate possible changes to policy. There are fewer transactions and new launches during the elections, say experts, adding investors’ decisions during the elections may be dependent on the prevailing sentiment in the market, performance of the share market and even the impact the exit polls may have had on the markets.
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1 Elections 2019: The impact on the real estate market
During its first term (2014), the government had given an impetus to infrastructure development and undertaken major policy overhauls such as DeMo, RERA and GST, amended old Acts like Insolvency & Bankruptcy Code and the Benami Transactions (Prohibition) Act, and launched schemes like 100 Smart Cities, Housing for All by 2022, Make in India, AMRUT Cities etc. The last five (from 2019) years have witnessed the overall impact of their implementation on the real estate sector, say experts.
Also, during the elections in 2019, the primary and secondary markets did slow down and aspiring buyers and investors opted to wait and watch. The momentum picked up after the results and after buyers and investors were assured of the government’s thrust on creation of new infrastructure.
It should be noted that India’s residential real estate sector witnessed a major slowdown between 2016 to 2019. The major market shake-up brought on by policy reforms between 2016 and 2017 was followed by the NBFC crisis post the IL&FS issue in 2018. This caused considerable turmoil in the residential real estate industry.
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Anarock Research points out that there is enough indication that 2024 may witness another peak in housing sales and new launches.
