The outcome of the 2024 Indian general elections has spiralled up the real estate industry, as it could significantly shape the sector's future. Political developments and policy changes have a thoughtful influence on market views and investor confidence in the real estate market. In this blog post, we will explore the potential shifts that homebuyers and commercial real estate investors may face, pinpoint cities that are likely to see new developments and growth, and examine the possibility of price fluctuations.

Shifting Market Trends & Policy Scenario

During general elections, the real estate sector often experiences a slowdown due to the uncertainty surrounding the election results and potential policy shifts. Investors tend to adopt a cautious approach, preferring to wait and observe market trends before making substantial decisions. However, once the election results are announced, the market is expected to regain momentum, driven by clarity on government policies and restored consumer confidence.

Homebuyers & Commercial Real Estate Investors

Homebuyers are less likely to be directly impacted by elections, as their purchasing decisions are primarily driven by individual needs and market conditions. On the other hand, investors may adopt a more cautious stance, influenced by market sentiment and the government's focus on infrastructure development. The sector is poised for growth, with a healthy interest-to-supply ratio and a decline in unsold inventory. Major developers have already acquired land for future development, indicating the potential for new launches across various segments.

Cities with New Launches & Growth Potential

The mid-segment and high-end segments currently dominate the market, but new launches are expected to span across these segments. Cities like Delhi, Mumbai, and Bengaluru are likely to witness new launches, driven by their strong demand and ongoing infrastructure development. Delhi, in particular, is expected to benefit from the government's emphasis on infrastructure development and the Delhi-Mumbai Industrial Corridor Project.

Price Trends

Real estate prices have surged in recent years, nearly doubling in the last four years. However, tax deductions offered on home loans haven't kept pace, resulting in the benefit of these deductions being halved due to rising property values. To achieve the government's objective of a $1-trillion real estate industry, reforms are needed to incentivize both buyers and investors. Reintroducing tax benefits that were previously available could be a significant step. The government may consider reducing GST rates in the industry for the end-consumer so that more people can realize the dream of owning a home. 

In conclusion, a stable government is crucial for the growth and development of the real estate industry, particularly the affordable housing sector. It can provide the necessary support and resources to ensure the timely completion of projects, attract more investments, and create a favourable business environment. This can help to address the housing needs of low- and middle-income households, ultimately contributing to the overall economic growth and development of the country.