Lok Sabha Elections 2019 effect? Realtors focussing on unsold unit sales
Lok Sabha elections 2019 model code has forced real estate developers to focus on unsold inventories.
Lok Sabha Elections 2019: Conventionally, the period between the announcement of the election date until the final result day is a period marked by caution and hesitancy in the overall real estate market. But, it doesn't mean real estate business becomes standstill. During this period, real estate developers start focusing on unsold inventories and refrain from launching new projects, especially during the model code of conduct time frame.
Speaking on the model code of conduct period and its connection with the real estate market Anuj Puri, Chairman - ANAROCK Property Consultants said, "In this period, developers understandably prefer to focus on selling their unsold stock rather than launching new projects. The time leading up to general elections is decidedly favourable for homebuyers as they can do some hard bargaining with developers who need to sell units for more liquidity," adding, "It certainly bears watching if the current Government remains in power to finish the work it has started in reforming the Indian real estate sector, or whether a newly-elected Government will hold on to the baton of change and take it to the next lap." Anuj Puri of ANAROCk said that the overall macroeconomic environment after the general elections will play a pivotal role in deciding the fate of the Indian realty sector in 2019 and beyond. For the sector to remain healthy and see wholesome growth, a stable Government at the Centre is a must. Also, the current growth momentum must sustain and not slow down.
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ANAROCK data suggests that 2014 (the year of the last general elections) saw the maximum launches and absorption across the top 7 cities, with nearly 5.45 lakh units launched during the year, and nearly 3.43 lakh units being sold. The previous year witnessed fewer launches (approx. 4.6 lakh units) and lower sales. The fact that the new Government came to power with a clear majority raised optimism, and the improved sentiment resulted in both sales and new launches picking up.
Speaking on the Lok Sabha Chunav effect on the real estate Rakesh Yadav, CMd, Antriksh India Group said, "While investors generally refrain from making market plays in this waiting period, buyers may also adopt a wait-and-watch stance. The reasons can vary from anticipation that a newly-elected Government may offer more sops to homebuyers to the hope that a re-elected Government may reward voters with such sops." However, with the spate of industry-shaking policies that followed thereafter, new launch and sale numbers declined y-o-y. Each new policy announced by the current Government brought its own kind of disruption to real estate, and the sector has not yet recovered completely from the ensuing confusion.
"Thus, despite a stable Government in power, reformatory changes with indubitably favourable long-term implications dealt severe blows to the real estate sector in the short-term. Their long-term benefits will accrue only with the continuity of their enforcement by this or the next Government," said Rakesh Yadav of Antriksh India Group.