The real estate sector has pinned its hopes on a stable government after the general election, which, at the least, would end the uncertainty that has stymied the market in the past several months. Builders say the sector is hoping for reforms and infrastructure support from the new government to help complete projects on time. Consultants believe the current slowdown in the sector, especially in NCR, is temporary and activity will pick up after the election results are announced.

1. T
he real estate sector is
in a bad shape in the
country. Many
builders say this is
mainly on account of the un-
certainty in the current extend-
ed season of general election in
the country.
A major Gurgaon-based
builder, who does not wish to be
named, says that the sector is
hoping for some stability in the
centre—which would enable
the much-needed reforms in
the real estate industry to flow
in—and support, in the form of
minimum infrastructural de-
velopment, so that projects can
be completed on time.
He says the sector would not
be much affected by the ideo-
logical bent of the new party in
saddle at the centre after the
general election, as long as the
government is stable and deliv-
ers on the ground.
Prices of property in the sec-
ondary markets have fallen
substantially. In some cases,
they have fallen by up to 20%.
The number of transactions
has also declined substantially
despite special schemes from
developers like 20% of the total
amount to be paid at the time
of bookings and the rest at
delivery. Sales are just not pick-
ing up.
Another Noida-based large
developer said there is a huge
uncertainty in the market due
to the slowdown in economy.
This, he said, has raised appre-
hensions of layoffs and a re-
sultant wariness of the
salaried class in risking invest-
ment in the property market,
which would create a huge
liability in loan repayment in
case of job loss.
In this condition, developers
feel that the election result will
play a major role in reviving
the sentiment. All the builders
feel that a stable government
would help in reviving the pres-
ent depressed mood in the econ-
omy, which in turn would lift
the fortunes of the real estate
too. They also hold out the re-
verse scenario, where a high
growth in real estate sector
would help the country in im-
proving its overall economy.
However, consultants say
that the real estate sector will
continue to grow in this coun-
try as there is a huge unmet
housing requirement in urban
India. While the hope of high
growth may be affected depend-
ing on the combination of
parties that form the govern-
ment, the overall growth would
continue in the sector never-
theless.
If the economy improves, the
demand for housing would also
grow. But, if the government
does not provide the requisite
support to the sector, the sup-
ply of housing units may be af-
fected. In that condition, the
gap between demand and sup-
ply would widen, resulting in
galloping prices of property.
Consultants say that the
present slowdown in the real
estate sector is temporary, espe-
cially in the NCR region, where
activities will pick up as soon
as the election result is out.
Buyers will come back to the
market even on the strength of
the smallest whiff of activity,
the consultants say.
Many experts say that prices
will also go up irrespective of
who forms the government. If a
non-performing government
comes at the centre, prices
would increase as the slow-
down in the construction activ-
ities would persist resulting in
widening the gap between de-
mand and supply. And if a
proactive government were to
come in, the general mood
would improve across the econ-
omy, pushing the prices up
once again, a developer said.
The fact remains that any
government can use the sec-
tor to revive the economy of
the country. The PHD Cham-
ber and real estate consultancy
firm Cushman and Wakefield
in a report said that India’s ur-
banization is a subject of glob-
al interest and can attract bil-
lions of dollars in investment.
According to the Planning
Commission, urban India is go-
ing to be home to 600 million
people by 2031—an increase of
59% from the 2011 level of 377
million people.
While on the one hand this
poses a huge challenge to our
urban planners and developer
communities, the situation also
offers big opportunities. If the
country as a whole rises up to
meet this gigantic challenge, it
will lead to the creation of mil-
lions of jobs—creating huge
wealth at the same time.
It is well known how urban-
ization boosts industries like
transportation, communica-
R E S I D E N T I A L A P T S : D E L H I / N C R
property index
LOCALITY PRICE RANGE
/Sq FEET
Chittaranjan Park 14450 to 18750
Defence Colony 28700 to 36900
Greater Kailash II 18500 to 23900
Panchsheel Enclave 21200 to 27800
Panchshila Park 20700 to 27650
Golf Course Road 12050 to 14400
Gurgaon-Faridabad Road 7400 to 9000
Sohna Road 7650 to 9850
Sector-50 7300 to 8850
Sector-61 7050 to 8100
Sector-92 7200 to 8100
Sector-93A 6650 to 8700
G U R G A O N
N O I D A
QUICK
BITES
I
CONSULTANTS
SAY THAT THE
PRESENT
SLOWDOWN IN
THE REAL
ESTATE
SECTOR IS
TEMPORARY,
ESPECIALLY IN
THE NCR
REGION,
WHERE
ACTIVITIES
WILL PICK UP
AS SOON AS
THE ELECTION
RESULT IS OUT
The real estate sector has pinned its hopes
on a stable government after the general
election, which, at the least, would end
the uncertainty that has stymied the
market in the past several months.
PRABHAKAR SINHA writes
tion, food processing, health-
care, education, etc. The joint
report keeps this reality in
perspective while arguing
that this whole process pres-
ents lucrative opportunities
for immense investments.
However, to expedite the
real estate activities to meet
the urbanization require-
ment, the report says that the
new government must create
an environment where the
whole system can function ef-
ficiently, so that the cost of
funding real estate projects
can be brought down. It says
rapid development will pro-
vide higher returns to in-
vestors than investment
made in developed countries.
But, in order to attract in-
vestments, “higher efficien-
cies” must be built into the
process of urbanization.
The report praised the
Manmohan Singh govern-
ment for launching the Jawa-
harlal Nehru Urban Renewal
Mission (JNNURM). Accord-
ing to the March 2012 data
from the ministry of urban
development, the JNNURM
has approved projects worth
$11.2 billion. But, the report
questioned the efficacy of the
whole process. It said policies
and plans must be supported
by sound execution.
But developers feel that ur-
banization is still not on the
priority list of most of the po-
litical parties. In fact, the real
estate sector is still consid-
ered by many as a sector
which thrives only on black
money. Premier developers’
bodies like Credai and Nared-
co have long demanded that a
regulator should be formed
for the sector, which would
monitor the industry and
safeguard all the stakehold-
ers’ interests.
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