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What will be the effect of Modi’s government on Indian real estate?

Updated on May 16, 2014

All well that ends well but this is just the beginning for India. Although the majority of the country is celebrating the historic win of BJP in the general elections 2014, real estate developers are keeping one hand on the other in anticipation of price rise. Since the last year, the Indian economy has slowed down which has affected several sectors and real estate sector is not an exception.

According to experts, a stable government brings stable economy which in turn results in stability in all sectors. The Sensex and Nifty have already experienced a record high because of big BJP win but property buyers are still waiting for some major policy decisions by the new government that will form in the centre.

Whether there will be further downfall in the property prices or a huge rise will be only clear after a month or two.

Most leading parties including BJP have sold Indian voters low-cost housing dream. According to some people, as BJP is in power it will try to fulfill this dream of people. People say that due to this real estate prices will further go down but this is not true because the low-cost housing schemes are meant for a certain economic class of people whereas real estate on a whole is a broader term.

Trend of property prices in India after Modi's win

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Experts believe that a stable government, which is BJP now under the leadership of Mr Narendra Modi, will really help the real estate sector remain stable.

Property prices have been down by 25 to 30 percent for more than a year now. Investors are still holding back all their money despite the big win of BJP. Developers have already undergone a lot of stress due to cash crunch they have experienced for the last year and a half.

The real estate market has completely dried up. There are no buyers in the market. Moreover, cash crunch has led to a lot of people selling their properties at lower prices, i.e., around 35 to 40 percent below the current market price. Builders and promoters are offering huge discounts but all in vain.

Now the real question is what will be the effect of Modi’s government on Indian real estate. Modi’s government in Gujarat has shown good governance. Will it show the same around the country? Will Modi be able to reduce the high interest rates? Will he provide economic and political stability to India? Will he be able to improve the approval process of real estate projects? Will he be able to provide easier bank funding to the investors or end users? Will he be able to attract investors and end users in the property market? We will soon get answers to all these questions, as all of this depends on the good governance of Modi’s government across the country.

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    • Ahdilarum profile image

      Ahdilarum 

      3 years ago

      Forget real estate, stock market is booming like anything. Most of the shares are traded at 4-5 times before modi entry..

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