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The 2024 Lok Sabha elections are expected to boost India’s housing market

Housing market

Based on ANAROCK India’s report, the Lok Sabha elections in 2024 could increase housing demand in India given that most real estate regulatory reforms have already taken place and the International Monetary Fund’s (IMF) GDP growth forecast for India is healthy.

According to the report, housing sales increased significantly both during the 2014 and 2019 election years.

A total of 3.45 lakh units were sold in the top seven cities in 2014, while new launches totaled nearly 5.45 lakh units. The number of housing sales in 2019 has increased to approximately 2.61 lakh units, while the number of new launches has increased to approximately 2.37 lakh units. Residential real estate prices declined between 2016 and 2019, following a dip in the previous year.

As a result of structural reforms enacted in 2016, such as the Real Estate Regulatory Act (RERA), the real estate sector increased its productivity and provided homebuyers with the necessary regulatory assurances.

“In the last few years, international organizations such as the IMF have predicted strong economic growth for India due to the fact that most real estate regulatory reforms and norms are already in place. It is noted in the report that the Indian economy is growing rapidly, which indirectly impacts the real estate market.

Additionally, ANAROCK reported that inflation is well under control, thereby bolstering homebuyers’ confidence and financial optimism.

At present, all indications point to a strong residential market in 2024. Anuj Puri, Chairman of ANAROCK Group, believes that the year may see another peak in housing sales and new projects.

Developers are closing land deals

The recent increase in homebuyer demand has prompted developers to close substantial land deals. The presence of many large developers is expanding in new territories as they have established track records and solid balance sheets.

As per ANAROCK data, 74 of the 97 land deals closed in 2023 will be devoted to residential development in Tier I, II, and III cities.

Real estate prices continue to rise

Based on Puri’s assessment, the election year of 2014 was a better one than the election year of 2019. Data indicate that in 2014, the average prices in the seven largest cities increased by over 6 percent over the previous year. For 2019, prices increased by only 1% on average.

Housing prices in the top 7 cities rose between 10 and 24 percent in 2023, with Hyderabad recording the highest increase of 24 percent. In these markets, the average price per square foot was approximately Rs 7,080 in 2012 and Rs 6,150 in 2022.

According to Puri, after the announcement of election dates, housing demand continued to be positive across cities, with homebuyers remaining highly optimistic about the real estate market.

Read Also: Biggest Housing Boom in 15 years

Homebuyers rush to close deals

Moneycontrol reported that Kiran Kumar, Vice President of Hanu Reddy Realty in Bengaluru, says that homebuyers are hurrying to close residential deals before the general election by 15 percent (compared with January 2024)

The majority of current homebuyers are end users, not investors, according to ANAROCK.

“Consumers will purchase when they can afford the ticket price. Regardless of the outcome of the election, property prices are increasing steadily. Those who can afford to purchase now will do so rather than risk paying too much later,” Puri stated.

Homebuyers have been clearly informed about the incentives offered by the incumbent government. The overall sentiment will certainly be bolstered by favorable election results, but they are already optimistic without a doubt, he pointed out.

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