Elections 2024 – Real Estate Looks Forward to Policy Continuity

Anuj Puri, Chairman – ANAROCK Group

The early trends and the exit polls for the recently concluded elections for the 18th Lok Sabha elections anticipated continuity of ongoing policies by the incumbent government. The real estate sector also seeks an assurance of predictability for this reason.

The current government had, over the last two terms, made significant 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 industry always looks towards a stable government that will ensure no interruptions in the ongoing schemes and investments into infrastructure development. This, above everything else, unleashes the real estate potential of current and developing geographies.

The interim budget indicated that with the government’s policies unchanged, the mid-segment housing sector would witness targeted action and policy alignment that would lead to further growth of India's housing sector. The mid-end (homes priced INR 40 lakhs to INR 80 lakhs) and high-end (homes priced INR 80 lakhs to INR 1.5 Crore) segments together recorded sales of 76,555 units in Q1 2024 which accounts for a share of nearly 59% of the total. The cumulative share supply for these segments in Q1 2019 was 47%.

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 INR 40 lakhs) sales in Q1 2024 recorded 26,545 units, which is just 20% of the total sales. Concurrently, supply in this critical segment had also dropped from 44% in Q1 2019 to 18% in Q1 2024.

Industrial and logistics parks, along with warehousing, will also look forward to further support for growth, with a massive potential for increased demand to be met in this sector thanks to an increased focus on manufacturing and improved connectivity.

Tourism and hospitality had also emerged as a bigger focus area for the government, as strongly indicated by the preliminary announcements in the interim budget earlier this year. This industry, too, looks forward to these plans being implemented as planned.

A stable government with a strong focus on development and increased expenditure to build assets reinforces the confidence of global investors who are hoping for a wider spread of options in India. Simultaneously, a strong opposition is always supportive of a vibrant democracy.