Lok Sabha elections 2024: Will the housing market create another peak like in 2014 and 2019?

Of the many things concerning people following a general election, the real estate market is one of the foremost. As the upcoming Lok Sabha elections approach, the question remains if the housing market will create another peak in 2024.

If the earlier trends of 2014 and 2019 are anything to go by, 2024 is likely to see another peak in housing sales and launches. 

According to Anuj Puri, Chairman of ANAROCK Group, “As things stand now, all signs currently favour the residential market in 2024, and the year can well create another peak in housing sales and new launches. Housing demand continues to be upbeat across cities after the announcement of the election dates, with homebuyers remaining highly optimistic about the real estate market."

A report by ANAROCK Property Consultants said that most real-estate regulatory reforms and norms are already in place, and the worst of the shake-up is behind us. It added that international organisations such as the IMF have strong GDP predictions for India in the coming years. The rapidly-growing Indian economy is expected to have a positive impact on the real estate market. Moreover, inflation is under control, bolstering financial optimism and confidence among homebuyers. Based on demand, developers have closed substantial land deals in the last year, while many are venturing into new territories. All these factors, the report stated, favour a new peak for real estate in 2024. 

In the previous election years of 2014 and 2019, housing sales had crossed new peaks. In 2014, sales in top seven cities scaled up to approximately 3.45 lakh units, while launches reached nearly 5.45 lakh units. In 2019, housing sales scaled up to approximately 2.61 lakh units while new launches increased to approximately 2.37 lakh units after a lull between 2016 and 2019. 

“Major structural reforms like DeMo, RERA, and GST, introduced in 2016 and 2017, transitioned Indian real estate from something of a Wild West frontier market to more organised and regulated. Most fly-by-night developers have exited the market since then and organised players have emerged in strength, significantly reviving confidence among homebuyers,” the report stated. 

Puri said that the decisive election results ended fence-sitting and made homebuyers more confident towards ‘buy’ positions. 

Trends suggest that 2014 was a better year than 2019, with average price rising 6 per cent on-year in the former, and 1 per cent on-year in the latter. But it must be kept in mind that the real estate sector suffered a major slowdown between 2016 and 2019. The market shake-up was brought on by policy reforms between 2016 and 2017 and the NBFC crisis post the IL&FS issue in 2018.

The green shoots of revival that blossomed in 2019 onwards was again dampened by the 2020 pandemic. The housing market went into overdrive from 2021 onwards and the momentum continues till date, the report added.