As General Elections are the flavor of the season going in India, everybody has been speculating about Real Estate scenario post elections. This is the only time which will tell us whether real estate market will witness boom or bane or remain intact. Real Estate Professionals are unanimous on one prediction that things will start looking up for the sector only in the second half of 2014 when clarity on the new government will emerge and businesses start investing.2013 was not a good phase for real estate, when all properties including residential, office and retail barring some cities such as Bangalore saw a steady decline in absorption. In 2014, situation might be changed as the general election of 2014 is anticipated to have positive bearing impact on real estate.
Scenarios after General Election: There can only be following 2 scenarios after general elections.
· Existing Government is re-elected
· New Government is elected
In both the scenarios there ought to be some changes in the existing market, both economic & financial. Of course the change would be more apparent changes in case the government is upturned. It is a known fact that Property market is highly affected by the health of economy & finance in the country.
Financial Impact: With a change in the politics, definitely there will be changes in the foreign investment policies of India and that will impact the way investments are made thereafter. Even if the Government remains intact, this market is in for changes. This is because; currently the policies are being formulated keeping in mind the vote-bank. Once the elections are over, policies will be reformulated and that will affect how investments are made in Real Estate.
Economic Impact: A change in politics will not have any direct or visible impact on the economic markets as it is controlled by an independent body, RBI. But yes, indirectly there will be a lot of effect here as economic policies have to be synchronized with financial markets. Any non-synchronization would lead to halted growth and inappropriate levels of inflation in the country.
Real estate will also get affected in this case also.
For those sitting on the barrier to purchase house or waiting to sell at a decent profit, the outcomes of this year’s general elections is expected to be a game changer. From the end-uses issue of view, it is probably the best time to purchase. One can aim on buying from resale market. As proposed earlier, there is powerful prospect that distress sales will increase and it presents end-users with an opportunity to purchase at lesser rates. However, buying in secondary market means, one has to pay huge money of property value in cash.
Reference URL: http://www.realthorizon.com/2013/11/effects-of-general-elections-2014-on.html