How Will Pre-Elections Affect Gujarat Realty Market?
While certain major markets in Gujarat such as Ahmedabad, Surat and Vadodara are gaining momentum, the overall realty market has hit a slump similar to most cities. With the Lok Sabha elections coming up, there is also political uncertainty before the elections, which is expected to further affect the realty sector making it stagnant and unproductive till post elections.
Economy is the key issue
The 2014 elections have gained more significance as the Gujarat chief minister himself is a Prime Ministerial candidate from one of the political parties. While realtors in Gujarat are not much concerned about the politics, they are concerned about the stability of the government. One of the most serious problems faced by the country in the last two years was exorbitant inflation and fall of the rupee value, both which affected the country’s real estate sector significantly. Only a stable government this time can address both the problems at the grass-root level. While most micro-markets are affected by local laws and policies, macro-markets are affected by actions taken at the Centre. As such, several realtors are anxious about election results.
How uncertainty affects realty
Developers generally get used to certain ways of dealing with things when a government and their policies are in place for a long time. For example, developers have been used to long waiting periods for clearances and NOCs. The same is true when it comes to both the Central and state governments. A fresh government at the Centre holds the potential to make policy changes that affect the real estate industry as well as shake up things for the sector. For example, the real estate regulatory bill and acquisition bill are expected to bring huge changes to the industry.
Though one would expect a fresh government to be formed, the major political parties are doing their best and fighting it out for forming the government at the Centre. This has definitely put many realtors in a state of anxiety. Also, decision taking becomes extremely slow during election periods. Fund investors, too, become very cautious during elections and prefer to wait-and-watch. All this further slows down the already slow real estate sector.
Realtors divided on expectations
Interestingly, some of the realtors in the state don’t have many expectations from the election results, especially with the speculations surrounding the new government. One real estate expert said that the economy is already bad in the country. Worrying further about the elections and formation of a new government wouldn’t help in any way. Some realtors also believe that, irrespective of the new government, business goes on as usual for the industry, despite some minor bumps. Fresh funds will also flow in irrespective of which government is formed at the Centre. Hence, a real estate player should not be really concerned about the outcome of the elections.
Having said that, the new government has some real challenges to address, especially the economy and how it will affect the real estate sector. As such, one can expect the anxiety to remain among the realtors till a stable government is formed at the Centre. Also with decisions pending regarding key policies till the elections are over, one may expect the real estate sector to go slow in Gujarat.
