Positive Impact of Real Estate Growth on Polls

In the upcoming general elections , where the BJP-led NDA is banking big time on real estate (particularly housing) led economic growth ) with the mantra of ‘Housing for All’, gains of reforms during the last 10 years of Modi rule are clearly visible in this sector.

A recent joint report by Anarock and the National Real Estate Development Council (Naredco) provides an insight into how structural reforms have contributed to the spectacular growth of housing in terms of sales and sustainability. The far-reaching reformist initiatives taken by the Modi government included Pradhan Mantri Awas Yojana(PMAY) , Real Estate Regulation Act (RERA0, Goods & Services Tax (GST) and Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund

The report, ” Real Estate Unboxed: The Modi Effect” , clearly highlights that around 2.82 million housing units were sold in the top seven cities of Bangalore, Chennai, Mumbai, Delhi-NCR, Hyderabad, Kolkata and Pune, between 2014 and 2023, while cumulative new launches stood at over 2.93 million units.

Towards the flagship mission of ‘Housing for All’, the fast tracking of completion of housing projects gained momentum. In 2023, India saw completion of nearly 435000 units in the top seven cities. Going forward in 2024, an estimated 531000 units are expected to be completed .

The landmark reform of RERA has played a great role in the spectacular growth of real estate and housing in the last decade. RERA that came into force in 2017, regulated the real estate sector, bringing in accountability of developers and safeguarding the interests of home buyers. It ushered in the much needed transparency and credibility in the sector, earning the trust of property consumers and investors alike.

Citing the latest data, the report mentions that nearly 123000 housing projects have been registered across states to date, following the inception of RERA. SWAMIH Fund aimed at providing financial support to stalled affordable and mid-income housing projects , contributed significantly to the completion of 26000 homes while another 80000 units are set to be completed in the next three years. A combined 33.75 million homes have been completed under the PMAY-Urban & PMAY-Gramin since their inception in 2015 and 2016 respectively.

What is really remarkable is that despite enhanced supply due to new launches and project completions, the housing inventory overhang saw a major drop over the past 10 years , from its peak of 41 months in 2017 to 15 months at the end of 2023.

The Anarock-Naredco report, besides highlighting the impact of government-backed initiatives like RERA, PMAY, SWAMIH Fund , GST and Demonetization, also brings into focus the positive impact of the growing adoption of technology in real estate. Proptech like blockchain and AI-driven analytics , have ushered in innovative solutions for property valuation , streamlining processes, enhancing transparency and improving the overall efficiency.

A decade of reforms under the Modi government , have laid the strong foundation for the future growth of real estate and housing, the major contributors to the country’s GDP.By 2025, the real estate sector is expected to contribute 13 percent to the nation’s GDP and by 2030 , the residential real estate sector’s market size is estimated to reach USD 1 trillion. Buoyed by the gains from reformist policies of the government, post-poll, the sector’s growth prospects will get strengthened by a stable government, leading to further reform push, economic , employment and investment growth.