All sectors and industries, including real estate, are aiming to continue structural reforms as the results of the 2024 Lok Sabha election are in, and all alliance partners have unanimously passed a resolution endorsing Narendra Modi, the leader of the BJP-led National Democratic Alliance, returning to power.
Real estate specialists think the current administration has taken the initiative to promote development and progress previously. Making significant policy changes and financial investments can positively impact the economy and the country’s development.
Anuj Puri, Chairman of ANAROCK GROUP says, “The real estate sector always looks to a stable administration to guarantee that ongoing programs and investments in infrastructure development won’t be disrupted. We anticipate a significant uptick in the affordable housing market with continued government support, given this flagship program has not performed well during the previous administration.”
He added, ” The interim budget indicated that with the government’s policies unchanged, the mid-segment housing sector would witness targeted action and policy alignment that would lead to further growth of India’s housing sector, Provided the government’s policies remained unchanged. This would result in the housing sector in India growing even more.”
The continuation of another term by the present government can impact the Indian economy and real estate positively:
Political stability has an optimistic impact on consumers and investors equally. India being a young country, is set to be the third largest global economy by 2027. The huge demand for homes would remain high, given the political stability and continuing emphasis on infrastructure development. The real estate luxury segment is specifically supported by an increase in the affluent population residing in the country and this demand will continue. Several initiatives bought by the BJP government, such as RERA need to be modified, to make it more successful in spirit.
The NDA in its third term will soon present the budget and this would be a perfect time to have a relook on GST weight on under-construction projects and tax benefits on home loans, this can push forward residential real estate favorably, says a source in the industry.
Real estate prices have soared in recent years and they now have almost doubled compared to four years ago. Unlike this, tax deductibility on the mortgage interest payments has not kept up with this growth rate. This would therefore mean that the net gain from these deductions is only half what it would have been considering the rise in property values.
“The government’s objective of a $1-trillion real estate industry can be achieved only if the reforms and policies give incentives to both the buyers and investors. One important approach could be to bring back previously available tax benefits. For example, a landlord can deduct all the rent from the interest paid on the property’s mortgage. Returning these benefits will encourage investment and increase overall home sales. It is very useful for homeowners in real estate,” as observed by another industry source.
As the world’s biggest election ends, developers say democracy has been a clear winner in the current political scenario. They are of the strong opinion that the focus on strengthening Indian real estate will continue by the NDA Government.
“The great election results show the strength of India’s democracy and the people’s faith in their leadership. We hope that the new government will continue to prioritize the real estate sector as an engine of economic growth. With a strong focus on infrastructure development and tourism, we believe the real estate sector will play an important role in building a prosperous and developed India till 2047”. Says Aditya Kushwala, CEO & Director of AXIS Corp.
Lakhram Goyal, Managing Director, Worldwide Realty, said that, as a real estate developer, he hopes that the government in Narendra Modi’s third term is determined to create an enabling environment for the growth and development of our sector.
Mr. Goyal added, “We look forward to consistent and clear policies to simplify requirements and reduce bureaucratic hurdles. A stable government can help ensure the implementation of major infrastructure projects, improve urban planning, and encourage affordable housing. We also hope to continue to support digitization and technological advances in real estate transactions. Economic stability, together with favorable fiscal policies, increase business confidence and attract domestic and foreign investment. In addition, we look forward to initiatives to improve the ease of doing business, simplify licensing procedures, and promote sustainable development. “Overall, a stable and strong government can drive growth, innovation, and success in the real estate industry, benefiting developers, financiers, and homebuyers alike.”
Based on the results, it is clear that the political risks have been avoided and the ball is in the hands of the government to ensure the structural changes that will ensure the growth of the real estate sector in India. Sustainable lands are effectively addressed by digitizing archives, encouraging green construction with tax incentives, making housing affordable, and creating rental housing as an asset class. It is very important to establish an independent regulator for direct and indirect housing investments.