How the general elections affects the real estate industry?
02 April 2014
India, the world’s biggest democracy is that close to an important general election and this situation has influenced many industries including the real estate sector and residential builders in India. Analysis says that the countries property sector has shown a sudden downfall in progress due to the uncertainty in the market which was created by the elections. The slow down was most affected the national capital with the new project launches been cut half.
Reuters reports that time delay in the administrative sector including the project approval and related paper works are possible since most of the government offices and officers are focusing on duties related to the polls. Another aspect is that the investors are diverting the funds from the market to the election campaign contributions and that makes most builders and developers hold launch of new projects, Reuters adds.
Many of the construction workers and contractors from different part of the country are on long leaves and will return only after casting their votes in their respective states. And this is a big factor that is affecting the time schedules of constructions including flats and apartments that are even previously booked and are reaching the dead lines.
India’s property market do face the high vacancy rates. Many builders and developers are waiting to sell the completed flats and apartments once the economy improves after the elections according to The Hindu. Many analysts denies that slow down has not affected whole industry and many of them are functioning smoothly. When the major victim of the slow down is North India, the southern and western part of the country was not been much affected by elections.
The uncertainty in the sector is expected to be relaxed once the general elections are over. Economic and employment policy decisions of the new government definitely will influence the real estate market and expectations are high. Political uncertainty will reduce the investor confidence and a new stable government coming into power will solve that issue for sure.
It is expected to have at least a 10 to 15 percentage of growth in the price range of flats and apartments once the market stands up. No matter which party will gain power the policies will be the key factor says the experts.