Impact Of 2019 Elections On Real Estate Sector

  • By Editor
  • 17th May, 2019

Elections have always been known to bring about some kind of disruption in the realty market. The impact of elections in a country as big as India is often constant and more prominent. The upcoming 2019 general elections are going to put some brake on the current momentum where home buyers have gained the confidence in buying real estate properties. Usually before the elections are taking place, homebuyers wait for sometime because they have few expectations from the new government being formed. As, the new government may bring new schemes, policies, rules, regulations and various offers for investments. The real estate sector, therefore, undergoes several changes before and after the elections in this case scenario.

Formation of recent reforms and policies like RERA, GST, strict financial condition law and cheap housing haven`t solely increased consumers sentiments within the property market however has taken a strict note on the corrupted builders and developers duping consumers from the ages. This light-emitting diode to a clear and unionized holding market where there was a rise in demand and provision of housing just as industrial units.

Developers, for most cases, refrain from propelling new projects until the results of the general elections are in. This is because of the vulnerabilities that developers may face identified with the practicality of regulatory approvals for their projects. During elections developers might face financial crisis to complete their ongoing projects and therefore, are expected to give heavy discounts on the properties.

During election time, the real estate sector is drained out of the system as a huge amount of funds are being used for electoral campaigns and promotions by political investors. This eventually results in limited supply left to complete the on-going projects. There is a lot of political uncertainty generated around elections, for instance, the newly launched projects might be delayed because of the changes in the ruling party and new policy announcement that might affect the project approvals and developments. Infrastructure is also hampered in the country due to the change in central government.

Real estate experts believe that property prices rise after the election. However, this would not be true always. Election usually does not affect the real estate market, they just have an impact on investors and homebuyers sentiments. When the ruling government repeats its term for certain states, there is risk associated due to strong economic growth for many investors.

The outcome of the 2019 election may hit the Indian Real Estate market directly or indirectly. A newly-elected government may work with new and fresh ideas that may create few problems in this sector as the developers and homebuyers may take time to adapt to the changes. Overall if you consider, the real estate sector has always seen a downfall in the past two decades, and the upcoming election in 2019 is expected to affect the real estate sector in a similar manner.