Election 2024 result impact: Maharashtra’s real estate market may go into a wait and watch mode ahead of assembly polls


After the announcement of Lok Sabha election results 2024, developers active in Mumbai and Pune expect the real estate markets in the state to go into a ‘wait and watch’ mode, considering the overall sentiment prevailing in the stock markets owing to the BJP-led NDA securing a reduced majority and the fact that Maharashtra assembly elections are due to take place later this year.

Election 2024 result impact: Developers active in Mumbai and Pune expect the real estate markets to go into a ‘wait and watch’ mode (Representational photo)(Pramod Thakur/HT Photo)

Having said that, demand from end-users is likely to continue as this is primarily need-based rather than investment driven.

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Also Read: Election 2024 results: Real estate sector hopes for continued focus on infra development, affordable housing

“We need to wait and watch until assembly elections in Maharashtra,” said a developer not wanting to be named.

“For now, the ongoing projects will continue to be launched and there will always be end-user driven demand in the affordable and mid segment. It is the luxury and uber luxury segments that may feel the pinch if the stock markets crash further and if the return on gold remains promising,” he added.

Will luxury launches get impacted?

Strong performance of the stock markets have all along been the driving force behind premium and luxury housing sales. “It is the performance of the stock markets, the profits booked by investors that drives demand for luxury housing from investors and wealthy end-users alike,” said another developer not wanting to be named.

Also Read: Election 2024 results: 10 things you should know about their impact on the real estate sector

It will be the performance of the stock markets that will dictate the demand for these luxury housing units going forward as well.

“Considering the election results and stock market situation right now, we can assume that sales in the ultra luxury segment of Mumbai real estate market might be impacted in the short term, say in the next 6 to 12 months. However, the mid segment may continue to do well and 700-1,000 sq ft homes may make a comeback,” said Harshul Savla, managing partner, M Realty.

“The reasons behind this is that going forward the new government’s policies might be populist, which will help the middle class. However, a lot will also depend on the upcoming assembly elections in Maharashtra. If we do not see a strong government in Maharashtra, a lot of redevelopment and land acquisition activity might slow down but for that we will have to wait and watch the situation for now,” he added.

Other developers agree.

“We may see changes in the government in the upcoming assembly elections in Maharashtra and the alliances between the parties may also have some impact on corporation elections of the Brihanmumbai Municipal Corporation. The real estate markets in Mumbai will react to developments in these elections,” said a developer from the city’s eastern suburbs, not wishing to be named.

“We need to wait and watch how the situation develops,” he added.

Impact on housing sales during the festive season

Real estate experts are of the opinion that the ‘wait and watch’ sentiment may continue even through the festive season as assembly elections may take place around that time.

As far as freebies and offers during the festive season are concerned, these will be dependent on the liquidity situation of real estate developers.

Also, if fluctuations in the stock market persist, tepid demand conditions are bound to prevail way into the festive season, says an expert not wanting to be named.

Prices are likely to remain stable, he added.

Will redevelopment project launches continue this year?

According to real estate developers, launches in the premium and luxury segments, at least in the case of Mumbai, are dependent on redevelopment.

“Redevelopment has picked up pace in Mumbai post the premium waiver by the Maharashtra government in January 2021. Several projects that have benefited from this waiver are now getting launched in the market, and they will continue to be launched over the next couple of years. Majority of these projects will be in the mid and luxury segment,” a real estate developer not wishing to be named said.

Also Read: Mumbai real estate market: Here’s why listed realtors are making a beeline for redevelopment projects

Further, launches in the Mumbai real estate market have gone down by 27% in Calendar Year 2023 compared to CY 22. They fell by 18% in the second half of CY23 compared to the first half of CY 23, according to Maharashtra Real Estate Regulatory Authority (MahaRERA) data.

In Mumbai, the number of units launched in the 3.5 and 4 BHK category was the highest at 1,509 in CY23 compared to the last three years in 2022 (1,402), 2021 (979), and 2020 (504).

“The number of launches getting reduced does not mean that the demand has gone down. In 2022, the launches went up due to the premium waiver and also because a lot of launches did not take place in 2020 and 2021 due to the Covid-19 pandemic,” a real estate developer said.

What is a premium waiver?

There are different types of premiums levied by local authorities in Mumbai to approve construction limits or additional construction for a particular project. In Mumbai, there are 32 types of premiums that a developer ends up paying to the authorities. Around 20 to 30% of the project cost goes towards these premiums, say real estate developers.

In January 2021, the Maharashtra government had given a 50% waiver in premiums paid by developers to the authorities. This made redevelopment of several old buildings viable and gave a boost to launches amid increase in housing demand post Covid-19 pandemic.

Will the pace of land acquisition slow down?

According to real estate experts, the pace of acquiring lands in the calendar year may have softened but may not go down significantly when compared to the last two years.

“The pace of acquiring land in Mumbai may have softened but has not gone down significantly. This is because big land parcels continue to be acquired by listed players as they have to keep up the momentum for their investors,” said another developer who did not want to be named.

Also Read: More than 101 land deals for approximately 2,989 acres closed in FY-24 across cities, including Ayodhya

Real estate developers and entities sealed approximately five big real estate land deals in FY 2023-24 accounting for around 70 acres in Mumbai, Pune and Nagpur, according to data shared by Anarock, a real estate consultancy in April 2024.

Real estate market in 2024 versus 2019 

Just before the elections in 2019, real estate markets such as Mumbai and Pune experienced a dull phase but sales in 2024 have increased by over 50% on the back of housing demand and positive sentiment, developers not wanting to be named said.

“I operate out of Pune, and I can tell you that in 2019 during the election year the market was dull, and there was not much activity. But in 2024, sales are 50% more when compared to 2019 and this is because post Covid-19, sales have increased pan India. However, the pace of land acquisition in Pune is lesser when compared to 2019 because land is more expensive. Increase in demand has led to prices going up,” said Pune-based Rahul Ajmera, developer at Vasupujya Corporation and a data analyst.

Another Pune-based developer said that the pace of approvals during an election year generally slows down and so do launches to some extent. 

In Maharashtra, approvals may have slowed in the last three months for Pune, but they will pick up pace in the next two to three months and then slow down again during the assembly elections, he added.



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