Gujarat realty anticipating regulatory and political changes
Dec 14, 2013
Source : The Times of India


AHMEDABAD: If regulatory changes have been a cause of concern for the developers in the Gujarat real estate market, the political uncertainty prior to the general elections definitely threatens to prolong the slump in the realty market. Elections and real estate market have a symbiotic relationship where elections bring a kind of stasis that is unproductive.

Moreover, realty business is very much dependent on the power houses for each and every clearances and NOCs, thus the market is always very conscious of the paradigm shift in the policies if a new government takes charge. Further, the general elections of 2014 hold more significance for the sector for reasons more than one.

The real estate sector has been looking at the formation of next central government and its policies with reference to the pending bills like regulator bill and land acquisition bill and is a anticipating due to political uncertainty. The sector is also conscious of the fact that any policy advocacy for rationalisation of the bills holds no ground if an unstable government comes to power. Also with Gujarat chief minister Narendra Modi considered as a Prime Ministerial candidate, the Gujarat real estate market is curiously waiting for the outcome of the next Lok Sabha polls.

However, with the economy continuously sliding down and the prospect of an unstable government not being in a position to stem the rot, few analysts believe that in the short term, there won’t be any significant impact on the sector. That may be the reason why Anshuman Magazine, CMD of CBRE South Asia, believes, “The sector should not bother too much about the outcome of elections at this point of time since the sentiments in the market are any way down. Had there been a 2007 market with sentiments bullish, then there was reason to be concerned as any policy delay would have adversely affected the business. But today, when in any way there is an element of economy uncertainty, outcome of elections won’t affect much. Moreover, business will go on irrespective of which government comes to power.”

He adds further, “Of course, a stable government would mean fast track policies but at this moment I feel that more than the government, it is the market forces that is keeping the sentiments down and the impending elections are only keeping the developers anxious. But I don’t see any significant impact during and after elections as far as the fortunes of the sector are concerned.”


Manan Choksi, Regional Owner, RE/MAX Ahmedabad, on the contrary, believes, “The General Elections may bring windfall gains for Gujarat property market. In fact, as the PM candidate is from Gujarat and hence the government is set to show a lot of progress. Thus, there is a fair chance that the Gujarat property market may perform better than before in the election year.”

He adds further, “Elections and politics directly affect the sentiments which indirectly affect the property prices. No doubt, major investments have slowed down due to country wide policy paralysis and this will continue in election time as well. However, post election irrespective of which party comes to power, investments will flow in.”

Anuj Puri, chairman, CII WR Infrastructure, Real Estate & Construction Sub-Committee admits that the outcome of the general elections would definitely have some influence on the market.

“Important regulations related to the real estate sector are still in between the approval and implementation process. I am confident that the dire need for seeing these regulations through is recognised and acknowledged in the right quarters. The delays may also because of the fact that every industry angle needs to be considered in such regulations so that they are not overly skewed or draconian towards any side, but holistically oriented towards growth,” says Puri.

Given the fact that the elections are dominating the political climate, it raises two schools of thought in the real estate market. Firstly, the prolonged political uncertainty will cause caution and hesitancy in the sector beyond a traditional election. Secondly, with the election mood set so much in advance, the marketplace will absorb the thought of election and its likely impact much more easily.

It is not just the next government’s economic policies that will be a key driver of the health of real estate, but the new government’s policies with respect to the pending realty bills in the Parliament will also decide whether the houses will be affordable or the supply side constraint borne out of new policies will kill the golden goose that promises to contribute significantly to the state GDP.

In any case, the new government has a couple of real issues of real estate to address, and that is what keeps the sector guessing as of now. Elections or no elections, developers are always dependent on the authorities, who give approvals. However, Gujarat real estate market this time around has an altogetherdifferent reason to smile even though being caught between the regulatory changes and political uncertainty as the prospect of prime minister from the state may provide new wings to the sector.


Latest Realty News

Sustainability required for increasing urbanization
Dec 13, 2013
AHMEDABAD: An exclusive thought leadership forum for architects was held in city on 'Intelligent Sustainability' on Wednesday. With urbanization on the rise there is a need to add a positive thrust to the nation's real estate market.
Ahmedabad real estate market looks promising
Dec 13, 2013
AHMEDABAD: Realty market is very sensitive in today’s scenario and any increase in borrowing cost will lead to consumer disappointment. However, we also understand that strict measures are required to curb the burning inflation and Rupee fall, but it is also equally important to keep other aspects of economy while taking strategic decisions. Although, looking at the strong fundamentals of the Indian economy and its robust growth, all these seem to be temporary.
Gujarat Waqf Board implements new law
Dec 12, 2013
GANDHINAGAR: The Gujarat Waqf Board has announced the implementation of the provisions of the newly-enacted central law, the ‘Waqf (amendment) Act-2013', in the state from November 1, 2013. Under the new act, no foreigner can be a Mutawalli (manager of waqf property) in India. Only an Indian citizen can serve as a Mutawalli in this country.
Gujarat govt warns town planning officers
Dec 11, 2013
AHMEDABAD: The state government has warned municipal corporations that strict action would be taken against town planning officers (TPOs) who deduct less land for common amenities from private property owners than the mandatory 40%. The urban development department has said that charges could be filed against such errant officers.
Sanand: More than a mere auto hub
Dec 10, 2013
AHMEDABAD: In the news for land acquisition issues in recent times, Sanand is a city and a municipality but above all, is an emerging property traction point in the automobile hub of Gujarat. Its emergence from a small village near Ahmedabad city, that was ruled by the Vaghelas, in to a property hotspot has a lot to do with the economic activity that was catalysed due to it being the automobile hub. It nevertheless carries a rich cultural legacy with the Palace which was built by the Vaghelas an
Illegal constructions of eight properties demolished
Dec 09, 2013
SURAT: As a first part of the mega Demolition drive under taken by Surat Municipal Corporation (SMC) , illegally constructed portions of eight properties were demolished in Central zone area of the city. In all 69,00 sq meters of illegally constructed top floors of properties were demolished with the help of 150 strong staff and machines.
Bricks expo in Ahmedabad on Dec 7 & 8
Dec 05, 2013
AHMEDABAD: Global machine manufacturers and raw material suppliers in brick industry, including those from China, will participate in ‘Bricks Expo 2013’, being organised here on December 7 and 8.
Faster approvals required for realty growth in Gujarat
Dec 05, 2013
AHMEDABAD: The real estatemarket in Gujarat has witnessed phenomenal growth over the last decade, with Ahmedabad and Vadodara turning into sought-after destinations. Nevertheless, there exists a mismatch between this performance and the realty sector’s potential. The general opinion in the market is that the realty sector’s performance in the state has only been modest, if not below par, owing to various challenges. Consequently, the sector’s true potential is yet to be unlocked.
Low prices pushing demand in new Ranip at Ahmedabad
Dec 04, 2013
AHMEDABAD: Ahmedabad is the financial capital of Gujarat. It is developing fast and it has already proved its worth in fields of business and economic activities. The city houses a large number of small, medium and large scale industries. Many MNCs and major Indian companies have set up their manufacturing units as well as corporate offices in the city. In addition, the fast growing IT industry has also created good number of job opportunities and as a result, there is huge influx of people in t
AMC wants registration of builders
Dec 04, 2013
AHMEDABAD: Just like architects, engineers and structural designers have to be registered with the Ahmedabad Municipal Corporation (AMC), the civic body has demanded the same for real estate developers.

Latest Realty News Of State

Realty Talk's