Updated June 4th, 2024 at 14:34 IST

Lok Sabha Election 2024: Real estate sector foresees growth in political stability

With government continuity, the property sector can look forward to a major boost for the affordable housing sector, say experts.

Reported by: Business Desk
Real estate sales up 68% | Image:Republic
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General election 2024: As the vote counting for the General Election 2024 progresses, predictions point towards the NDA forming the government, even if with a marginalised majority. Real estate experts hail the potential stability, foreseeing a positive impact on the affordable housing sector.

"With government continuity, we can look forward to a major boost for the affordable housing sector, this being a flagship scheme that had not fared well over the last term. Affordable housing (homes priced under Rs 40 lakhs) sales in Q1 2024 recorded 26,545 units, which is just 20 per cent of the total sales. Concurrently, supply in this critical segment had also dropped from 44 per cent in Q1 2019 to 18 per cent in Q1 2024," Anuj Puri, Chairman, Anarock.

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Power of policy continuity

Puri stressed the importance of policy continuity in the real estate sector. "The current government had, over the last two terms, made notable strides on the policy front, and in the development of the nation. The economy grew with major investments into developing the country. The real estate sector always looks towards a stable government that will ensure no interruptions in the ongoing schemes and investments into infrastructure development."

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Puri further highlighted the growth trends in the mid-segment housing sector and the positive impact of government policies on it. "The mid-end and high-end segments together recorded sales of 76,555 units in Q1 2024, accounting for a share of nearly 59 per cent of the total. With government continuity, we can look forward to a major boost for the affordable housing sector."

G Hari Babu, National President, NAREDCO, outlined specific expectations from the government regarding home loan EMIs and policy reforms. “We are seeking specific actions from the government to address the rising home loan EMIs and interest rates. We urge the government to provide relief by offering lower interest rates for affordable housing loans.”

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Realty's critical juncture

G Hari Babu, National President of NAREDCO, highlighted the critical juncture at which the real estate sector finds itself, balancing substantial growth potential with significant challenges. With targets of reaching a market size of $1 trillion by 2030 and transitioning into a net-zero carbon industry by 2047, Babu stressed the role of government support. "Addressing rising home loan EMIs, implementing key policy reforms, and introducing sustainability incentives are essential," he asserted.

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Expressing concerns over the burden of escalating home loan EMIs, particularly for middle-class families, Babu outlined specific actions he seeks from the government. "We urge the government to provide relief by offering lower interest rates for affordable housing loans," he said. Proposing a practical solution, he suggested setting the initial portion of home loans at a reduced interest rate for the first five years.

Highlighting the necessity of policy reforms to catalyse growth, Babu advocated for adjustments in financial limits to enhance accessibility to affordable housing. "Raising the Rs 45 lakh limit to Rs 60 lakh would address the challenges faced by builders and buyers," he explained. This adjustment would align with the current economic realities, enabling builders to construct affordable homes and facilitating purchases for prospective buyers.

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Moreover, he stressed the importance of providing support for sustainable development, including tax incentives for green buildings and policies promoting energy-efficient practices, to align with the sector's goal of achieving net-zero carbon status by 2047.

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Published June 4th, 2024 at 14:34 IST