The return of an existing government to power positively impacts the Indian economy and the real estate sector.
As the 2024 Lok Sabha election results are now out and there is a high probability of the BJP-led coalition government coming back to power again, all sectors and industries — including real estate — have set their sights on the continuation of structural reforms.
Industry experts believe that the current government had, over the last two terms, made significant strides on the policy front, and in the development of the nation. The economy grew with major investments into developing the country.
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“The real estate industry always looks towards a stable government that will ensure no interruptions in the ongoing schemes and investments into infrastructure development. With government continuity, we can look forward to a major boost for the affordable housing sector, this being a flagship scheme that had not fared well over the last term. 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,” said Anuj Puri, Chairman, ANAROCK Group.
The return of an existing government to power positively impacts the Indian economy and the real estate sector. Political stability significantly enhances confidence among both consumers and investors.
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“We are a young country, poised to become the third largest global economy by 2027, and demand for homes is inevitably going to remain strong, now that we have stability on the policy front and continued focus on infrastructure development. The growing number of affluent in the country, particularly benefits the luxury segment of real estate and we expect the buoyancy to continue. We do believe that several of the measures brought in by the BJP-led government such as RERA need far more fine tuning, to be effective in spirit. NDA 3.0 will also be presenting the union budget soon, and this will be an opportune time to relook at GST burden on under construction homes, and increase the tax breaks on home loans, to encourage wider home ownership,” said Amit Goyal, Managing Director, India Sotheby’s International Realty.
Badal Yagnik, CEO, Colliers India, also said that the real estate sector expects continuation of structural reforms and policy support from the new Central government. “RERA & GST implementation, national policies specific to logistic parks & data centers and overall infrastructure push in the form of National Infrastructure Pipeline & Gati Shakti National Master Plan have instilled a sense of confidence amongst various real estate stake holders in the last decade. These long-term measures to balance growth while maintaining fiscal discipline will be pivotal to drive equitable public & private investment in the economy. A progressive and an economically viable vision is inevitable if real estate sector is to reach a USD 1 trillion market, forming 13-15% of the country’s GDP by 2030,” he added.
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It may be noted that real estate prices have surged in recent years, nearly doubling in the last four years. On the contrary, tax deductions offered on home loans haven’t kept pace. In effect, the benefit of these deductions has been halved taking into account the rising property values.
“In order to achieve the government objective of $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. For example, landlords could deduct their entire rental income against the interest paid on the property’s mortgage. Restoring such benefits would encourage investment and boost overall property purchases. This will benefit homeowners a great deal,” observed Samir Jasuja, CEO and MD of PropEquity.
Developers say democracy is the clear winner in the General Elections 2024. As the world’s biggest election has come to a close, they are hopeful that the new government will continue to focus on strengthening the Indian real estate industry.
“Being a strong pillar in the growth of the economy, initiatives like Housing for All and PMJAY propel the real estate sector to play a critical role in building a Viksit Bharat in the long run. We are also hopeful that the new government will consider reducing GST rates in the industry for the end-consumer so that more people can realize the dream of owning a home. We also expect continuity in the policies related to women and their role in economic growth,” said Amrita Gupta, Director of Manglam Group, and Founder President of CREDAI Rajasthan Women’s Wing.
Aditya Kushwaha, CEO and Director, Axis Ecorp, said, “The decisive election results demonstrate the strength of India’s democracy and the people’s faith in the leadership. We are optimistic that the new government will continue to prioritize the real estate sector, a critical driver of economic growth. With a focus on infrastructure development and tourism, we are confident that the real estate sector will play a pivotal role in building a prosperous and developed India by 2047.”
Aman Gupta, Director of RPS Group, said, “Based on the observations made, it is clear that political risks have been averted and the ball is in the government’s court to ensure structural changes which will ensure the growth of India’s real estate sector. Sustainable lands shall be effectively dealt with through digitization of records, green construction should be encouraged through tax incentives, and rental housing shall be established as an asset class. It is crucial to establish an independent regulator for direct and indirect PP housing investments.”
