7th pay commission may boost the realty sector

Q: The real estate sector is set to bounce back as 7th Central Pay Commission's recommendations come into force.

Miraniyatin, Mumbai

4th December 2015

Real estate News in Mumbai

7th pay commission

central pay commission

23.60 percent rise in central govt wages

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Replies (3)

Yes, a 16% rise in basic salary and the 138.7% increase in house rent allowance (HRA) could inspire the demand for housing.

Diptarishi dev, Kolkata

4th December 2015

Comment

On the other hand, once the objective of primary home ownership is achieved, buying a second home as an investment is favored. Therefore, increased take-home salaries will definitely improve the overall appetite for home buying.

Ankita, Ghaziabad

4th December 2015

But as per expert's view, automobile, consumer durables and real estate companies stand to gain the most from the pay raise. We have also seen the impact of 6th pay commission in 2008 which helped contain the impact of the global financial crisis following the failure of Lehman Bank.

Ankita, Ghaziabad

4th December 2015

Comment

Yes, implementation of 7th pay panel report will help revive consumption and improve capacity utilization which was affected owing to two consecutive years. Increased income may definitely improve the appetite for home purchase. Home ownership continues to rank very high among most Indians' priorities and it is an aspiration which is often put on hold due to insufficient regular income flows.

Shweta Salunkhe, Pune

4th December 2015

Right Shweta,
First, it hints a higher disposable income. Second, higher HRA will boost rentals and with the cost of property remaining range-bound, it will improve rental yields. This, in turn, could motivate investment in residential property.

Ankita, Ghaziabad

4th December 2015

Hi,
Will the 7th Pay Commission help the real estate sector that has been involved in a host of problems over the last many years?

Rajiv,

4th December 2015

Comment

Hi Rajiv,
I think its a good question and everybody should know that if we trace the history of such central government salary revisions in the past, i hope that it will boost consumption in the economy. 23.60% rise in central government wages is likely to have an impact on consumption and demand.

Shweta Salunkhe, Pune

4th December 2015