Real hope Blooms in Real Estate Sector

The stakeholders in the real estate sector are expecting sentiments to turnaround in the market after the BJP-led NDA posted a decisive victory in the 2014 general election. Developers and consultants say that the prices of residential and commercial properties will see an upward trend, as the investment climate has improved.

Owing to the bad sentiment prevailing in the entire economy, end users as well as investors deferred their decision to enter the market, property dealers and consultants said. The main apprehension of buyers was that the slowdown in the economy might further deepen affecting their job prospects. But the Friday election results have come with a silver lining and most of the stakeholders are now of the opinion that the economy as a whole, and the real estate sector in particular, will see a turn around. The sudden spurt in demand for the residential as well as commercial real estate would increase the activities in the sector and is likely to push prices up. “The election results will certainly improve sentiment in the real estate.

Experts say that to revive the real estate sector, the Narendra Modi government, which will be sworn in on May 26, will have to take an immediate call on amending the recently-passed Land Acquisition (Rehabilitation and Resettlement) Act 2013, which is high on demand of the industry as well as the infrastructure ministry. Developers, builders, and the respective infrastructure development ministries feel that if the real estate sector has to be revived to meet the housing demand in the country and increase the infrastructure building activities, the Land Acquisition (Rehabilitation and Resettlement) Act, 2013 must be amended.

Developers and builders say that if the current act is implemented in its present form, township projects on more than 50 acres cannot be implemented. The provision of rehabilitation and resettlement of the the landowners whose lands have been acquired should be done away with; in fact, the industry bodies argue that land acquisition by private players should be out of the ambit of the act.

The real estate sector has also been left in the lurch with reduced traction, high levels of unsold inventory, and rising cost of funds. The sector is hoping for stimuli like lower interest rates, job creation, and tax rebates to ensure sustained growth. A lower mortgage rate and incentives for home loans are going to be the key triggers in fortifying demand.