[vc_row][vc_column width=”2/3″][vc_column_text]Only a few events can affect the real estate market in Hyderabad like the general election. This nation-changing event affects all aspects of the operation of our country. Everything ranging from pension plans of retired employees to funding for space research can change in a few days. These changes determine the future of India for many years to come.
With an event like this occurring, it will definitely affect everyone involved in the real estate market. Both the buyers and sellers are affected in a direct manner, causing changes in the working of the industry.
There are 2 phases of change that occur during elections which are the pre-election and the post-election phase.[/vc_column_text][vc_row_inner][vc_column_inner][vc_column_text]
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Effect of pre-election on real estate market in Hyderabad
The day the election date is announced is when the environment in the real estate market in Hyderabad changes. It becomes normal again on the day when the election results are announced.
This is especially true for the builders and developers as they become very cautious. They don’t do any unnecessary activities like announcing any new projects. It is as if they are walking in ice and aren’t sure when the ground beneath them is going to crack.
This is an understandable reaction as all the plans and laws that the ruling government has implemented can be revoked. This could lead to tremendous losses to builders and realtors. That is why the high-end real estate developers try to sell their unsold units instead of advertising the new ones.
The election causes confusion among the buyers as well. The change in government could cause problems to them too.
All this uncertainty reduces the pace of the real estate of the market. It is almost as if everyone is waiting for the election to be over so that there is a more stable way of making decisions.
Reason for concern
The 2014 election is a good example of how real estate can benefit from a change in the ruling party. The implementation of GST, strict insolvency laws and RERA act have boosted the sales in real estate. It has both increased the supply and demand for properties. This is a positive change, but the effect could have been the opposite of what happened. Here are 2 examples of the change that could occur due to change in the ruling party.[/vc_column_text][vc_column_text]
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Effect of GST on Real estate
By generalizing the taxing system, the BJP government has both reduced and also created many problems.
In real estate, the developers were not happy with the GST decision as input tax credit would be problem. To solve the government decided that the developers could choose if they wanted to change their policy on GST. It said that projects that have begun before 1st of August 2019 get to choose if they want to opt for this change or not. This solved the problem on the builders and the developers end.
GST was always aimed to be helpful to the buyer as it reduced the total amount paid by reducing unnecessary taxes. This encourages more people to invest in real estate, especially housing real estate.
Effect of RERA on real estate
RERA is an organization appointed by the government to supervise all real estate projects. The government gave states the option to opt for this to improve the implementation of laws in the real estate industry.
22 states and 6 union territories have implemented this with amazing success.
This act ensures the builder is being honest, reliable, and fair, authorized and maintains good quality. Even if the builder doesn’t do a good job, there is a place to complain now.
When huge changes like this are made for the 2014 election, it was likely that more changes can happen if the ruling party stays in power. Actions taken by the ruling party can be taken back by the new ruling party. That is the most important reason for the real estate market in Hyderabad to have a slow pace pre-election.
A lot of properties are converted into liquid cash during election time. Most of these properties are large chunks of land or high-end commercial properties.[/vc_column_text][vc_column_text]
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The expectation of post-election on real estate
With the 2019 election going in favor of the BJP, with achieving a landslide victory over its main opposition of the Congress party. There are a few expectations from the BJP government this tenure. Although they mostly contributed positively to the real estate industry in the past 5 years, there are many more changes that need to be made.
Changes in GST
The reduction in GST to 5% has made a great impact on the industry, the developers were hoping to get even more relaxation in the percentage. Additionally, the developers hope that the government should remove input tax credit, as it is the source of a lot of spending and confusion. They would also like the government to address the lack of clarity over GST and implementation of the RERA act as well.
When these changes are made, it will lead to lower costs for buyers and investors as well. It will encourage them to invest in housing real estate, meaning everyone will be benefited.[/vc_column_text][vc_column_text]
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Housing for all initiative
The government is focusing on providing housing for people from all sectors by 2022. For this, they have reduced the cost of utilities and reduced taxes. This also means that the cost for all projects that are a high end will be reduced as well. This will increase the margin that the developers get, thus compensating for the loss they sustained during the early years of GST and the RERA act. Due to the reduction in cost, the selling price will be reduced as well.
Conclusion
Although the pace of the real estate market was slowed down pre-election, it has started to go up again. With people trusting the BJP government to continue doing good for the real estate industry, sales have gone up. The price of the property is bound to increase shortly. So, if you were looking to buy a home and were waiting for the elections to be over, now is the time.[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][vc_column width=”1/3″][vc_column_text el_class=”post-contact-form”][fc id=’2′ align=’center’][/fc][/vc_column_text][/vc_column][/vc_row]