New Delhi, June 19, 2019: The recent survey by 360 Realtors indicates that 81% of the home buyers believe Modi 2.0 will have a positive impact on the Real Estate. Around 57% of the respondents have demonstrated a possible rise in average property prices in the next 12 months.
In the recently held LS elections, Mr. Modi & his party has stormed to victory with a thumping majority. Mr. Modi’s re-election is generating a lot of euphoria in the Real Estate industry as well. As Mr. Modi is widely known as a pro-reformist, it is believed that in the foreseeable future, the continuation of broader policy changes will be seen in the Indian Real Estate. This will bring in more structure & transparency in the industry, thereby further vitalizing the sector & fuelling more demand.
As a leading Institutional Channel Partner (ICP), we were also intrigued to learn apart from the industry, how home buyers will view Mr. Modi’s coming back to power. In order to understand the exact home buyer’s sentiments, the survey of 3000 home buyers was conducted recently. The survey results once again confirm the ascending tendencies in the market, as 81% of the respondents believe that Mr. Modi’s coming back to power will entail a positive outlook for the Indian housing industry. The positivity in the industry could be attributed to growth in infrastructure (44%), streamlining of reforms (45%) & boost to affordable housing projects (42%).
Surprisingly, a moderate 30% respondent believes that under Modi 2.0 a more positive economic outlook will emerge. This highlights the underlying concern in the market about the economic outlook. GDP growth has moderated in recent times due to a slump in consumer spending & ongoing global trade wars. A softening of the economic outlook might not be a very healthy sign. However, we believe steps taken by the government to boost liquidity along with moderate inflation in the market (~4%) can reverse the recent slowdown in consumption. As the industrial output is also expected to grow in the 2nd half of the year, it should further contribute to economic acceleration.
Around 57% of the respondents believe that home prices will rise in the next 12 months, whereas 27% believe otherwise. The remaining showed that they are clueless about any possible change in prices. A sizable (19%) believe that price gain in average property prices will be in tune to 2-5%. As an ICP, our experiences also suggest that average gain in prices will be moderate as the current market is mostly end user driven.
Expectations from Union Budget 2019-20-
“Post Modi’s thumping majority in the Parliament, there has been a huge spurt in sentiments- both for the industry players as well as home buyers. A recent survey by 360 Realtors shows that 81% of home buyers (out of 3000 respondents) think Modi 2.0 will bring more positivity into the industry. Around 57% believe that on the back of positive reforms, growth in infrastructure & rising demand, property prices will grow in the next 12 months. Around one-fifth of such respondents believe the increase will be in tune to 2-5%. As a Real Estate advisory, we find the numbers to be plausible, as Mr. Modi is known for his reformatory agendas & taking stronger initiatives. As the government has earlier taken a host of initiatives such as RERA, GST, Demonetization, Housing for All, etc. his commitment towards the industry is unquestioned.
However, at the same time, we also believe that in the 2nd installation, the government needs to put sustained efforts towards the industry in order to capitalize on the rising momentum. Besides streamlining RERA implementation, Modi 2.0 should take more proactive steps to tackle growing piles of unsold inventories, along with incentives for developers & cost rationalization. Developers are long waiting for a single window clearance. We are hopeful that in this budget session, the government will take this into account, as this can go a long way towards reducing the cost & time incurred on property development. A part of this correction will also be transferred to end users thereby giving thrust to housing demand.
Ancillary industries such as cement are also looking for tax rationalization. Currently, a very high GST rate of 28% is charged on the cement industry. Rationalization of the rates would not only help cement producers but positively impact Real Estate, infrastructure & transport sector. It will also be crucial for the government’s ambitious plans such as infrastructure upgrades, housing for all, etc.”- By Mr Ankit Kansal, Founder and MD, 360 Realtors
Corporate Comm India(CCI Newswire)