The real estate market is greatly reliant on consistent policy conditions and a favorable economic setting, both of which are expected to be affected by the results of the election.
A solid majority and a clear direction for changes in fields like property acquisition, infrastructure development, and business support could significantly propel growth in the real estate sector.
Prime Minister Narendra Modi has secured his third term in office. However, the Bharatiya Janata Party (BJP) relies on support from other coalition partners, especially the leader of the Janata Dal (United) (JDU) Nitish Kumar, and the leader of the Telugu Desam Party (TDP), Chandrababu Naidu, as they are 32 seats short of the majority mark of 272.
Professionals in the housing sector believe the BJP’s win in a third term signifies it has achieved unparalleled policy stability, something the real estate sector has been eagerly awaiting.
Undoubtedly, the results of a general election frequently have a huge impact on the housing sector, primarily on investors’ confidence in the real estate industry, and hence their investment decisions will rely on the country’s political environment as decided by the election results. Political stability and economic outlook play a vital role under these circumstances.
According to experts in the real estate industry, the election results can greatly impact the real estate market. Here are the views:
Indian real estate had never paid close attention to rental housing in the past. The government’s ability to pass its new Tenancy Act, which is the “Model Tenancy Act” introduced in 2021, has been introduced to establish a Rent Authority that oversees the rental of premises. Its primary objectives are to safeguard the interests of both landlords and tenants while providing a speedy resolution mechanism for disputes related to rentals.
The government, due to its large majority in parliament, passed the act in 2021. When investors are given the power to question contracts and understand the content of these leases, they find it easy to put money into other investments, such as housing for themselves, which leads to an assurance of profitability from one’s property if they prefer to reside on it or rent it out.
Projects built for rental purposes are now being considered by residential builders from tier-two cities on par with metropolises. According to market sources, even individual entrepreneurs are now willing to invest in rented homes in urban centers and tier-2 ones. According to Gunjan Goel, director at Goel Ganga Developments, “private developers investing in projects that are predominantly constructed for rental purposes in mind for the buyers is increasing in both urban and tier-2 cities.
The ₹25,000 crore stressed asset fund shows the government’s dedication to tackling issues with stalled housing projects in the real estate sector. Offering priority debt to the sector, has boosted buyer confidence, leading to a quick revival of construction activities and housing completions in major markets, right after the election results.