PM Modi’s third term boosts real estate market: Stability, reforms, and investor confidence

Prime Minister Narendra Modi has secured a third term in office, but the BJP fell short of a full majority by 32 seats, necessitating coalition support from key allies like JD(U) chief Nitish Kumar and TDP’s chief Chandrababu Naidu. This coalition victory has significant implications for the real estate market, bringing much-needed policy certainty and bolstering investor confidence.

The scale of the BJP’s victory has delivered unprecedented policy certainty, which is crucial for the real estate sector. Political stability and clear government policies directly influence investor confidence, affecting real estate investment decisions positively.

Key policies and reforms

New Tenancy Act:

The government’s new tenancy act has revitalized the rental housing market by introducing accountability measures and transparency in rental agreements.

Stressed Asset Fund:

The ₹25,000 crore stressed asset fund reflects the government’s commitment to addressing stalled housing projects. Offering priority debt has restored buyer confidence, leading to a swift revival of construction activities across major markets.

Credit Linked Subsidy Scheme (CLSS):

The extension of CLSS under PMAY until December 2024 has significantly boosted demand.

Realty Stress Fund:

The establishment of a ₹60,000 crore realty stress fund has provided crucial last-mile funding to builders, allowing them to resume construction projects.

RERA and Consumer Protection:

Institutionalization of RERA across states to enhance consumer protection and developer accountability.

Urban Infrastructure Initiatives:

Initiatives like Smart City, AMRUT, and Pradhan Mantri Awas Yojana (PMAY) have increased demand in the real estate sector post-elections. These efforts focus on improving urban infrastructure and providing affordable housing, thereby enhancing the quality of life in cities.

Structural Reforms:

Government’s focus on structural reforms to liberalize the economy, particularly in infrastructure and renewable energy sectors. Anticipated reforms in land acquisition and business practices are expected to attract increased investor interest and spur further growth in the industry.

Prime Minister Modi’s third term has brought stability and policy certainty, crucial for the real estate market. The government’s commitment to reforms and infrastructure development has bolstered investor confidence, leading to a positive outlook for the sector. With continued political stability and strategic initiatives, the real estate market is poised for significant growth in the coming years.