General Elections may favour realty market in 2024: Anarock

Inflation is currently well under control, bolstering financial optimism and confidence among homebuyers. Based on growing homebuyer demand, developers have closed substantial land deals in the last one year, and most of their balance sheets are clean. Many large developers with good track records and solid balance sheets are venturing into newer territories to increase their presence

Hyderabad: The current election year – 2024 may witness a boom in the Indian housing market. All signs currently favour the residential market, and this year can well create another peak in the residential sales and new launches, says Anuj Puri, Chairman of real estate consultancy Anarock Group.

Speaking about the market scenario, he says: "Housing demand continues to be upbeat across all major cities in the country after the announcement of the election dates, with homebuyers remaining highly optimistic about the real estate market."

The data trends of previous two election years, 2014 and 2019, indicate housing sales create new peaks. In 2014, sales in the top seven cities scaled up to approximately 3.45 lakh units while new launches were the highest ever at nearly 5.45 lakh units.

Likewise, in 2019, housing sales scaled up to 2.61 lakh units while new launches increased to 2.37 lakh units after a lull in the residential real estate market between 2016 and 2019. Major structural reforms like DeMo, RERA, and GST have transitioned the real estate market into more organised and regulated.

Anuj Puri says, “Most real estate regulatory reforms and norms are already in place, and the worst of the shake-up is behind us. International organisations like IMF have strong GDP growth predictions for India for the next few years. The Indian economy is growing rapidly, and this indirectly has a positive impact on the real estate market.”

He adds, “Inflation is currently well under control, bolstering financial optimism and confidence among homebuyers. Based on growing homebuyer demand, developers have closed substantial land deals in the last one year, and most of their balance sheets are clean. Many large developers with good track records and solid balance sheets are venturing into newer territories to increase their presence.”

“Most fly-by-night developers have exited the market since then and organised players have emerged in strength, significantly reviving confidence among homebuyers. A major factor driving the housing market's phenomenal performance in 2014 and 2019 would have been the decisive election results. For homebuyers, it was an end to fence-sitting and a confident move to 'buy' positions."

On examining the price trends in these election years, it emerges that 2014 was a better year than 2019. In 2014, the average prices in the top seven cities rose by over 6 per cent annually against the preceding year – from Rs 4,895 per sq ft in 2013 to Rs 5,168 per sq ft in 2014. As for 2019, average prices rose by merely 1 per cent annually – from Rs 5,551 per sq ft in 2018 to Rs 5,588 per sq ft in 2019.

India's residential real estate sector witnessed a major slowdown between 2016 and 2019. The major market shake-up brought on by policy reforms between 2016 and 2017 was followed by the NBFC crisis post the IL&FS issue in 2018. This caused considerable turmoil in the residential real estate industry.

From 2019 onwards, the first green shoots of revival were temporarily dampened by the pandemic in early 2020. Thereafter, against all expectations, the housing market went into overdrive from 2021 onwards and the momentum continues

till date.