Trends From Past Elections Reveal General Elections Predictably Impact Residential Realty Market

New launches reached a historic high of nearly 5.45 lakh units, signifying a robust market, as per Anarock Group

Despite the initial setback caused by the pandemic in early 2020, the housing market exhibited remarkable resilience from 2021 onwards, sustaining its momentum.

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Recent data trends suggest a close correlation between general elections and the performance of the residential real estate sector in India. Analysing the years of 2014 and 2019, both election years, unveils significant peaks in housing sales, according to Anarock Group.

In 2014, a notable surge was observed in housing sales across the top 7 cities, reaching about 3.45 lakh units. Simultaneously, new launches reached a historic high of nearly 5.45 lakh units, signifying a robust market. Similarly, during the 2019 elections, housing sales escalated to approximately 2.61 lakh units, accompanied by an increase in new launches to about 2.37 lakh units.

This resurgence followed a period of stagnation in the residential real estate market between 2016 and 2019, attributed to major structural reforms such as DeMo, RERA, and GST.

The implementation of these reforms transformed the Indian real estate landscape from an unregulated frontier market to a more organised sector. Consequently, many unreliable developers exited the market, allowing organised players to flourish and reinstating confidence among homebuyers.

Anuj Puri, chairman of Anarock Group, attributed the remarkable performance of the housing market in 2014 and 2019 to the decisive election outcomes. He remarked that these results prompted homebuyers to transition from a state of indecision to confident investment decisions.

Examining price trends in these election years, 2014 emerged as a more favourable year compared to 2019. Anarock data reveals that average prices in the top 7 cities increased by over 6 per cent annually in 2014, whereas in 2019, the rise was a mere 1 per cent. The residential real estate sector experienced a significant slowdown between 2016 and 2019 due to the combined impact of policy reforms and the NBFC crisis triggered by the IL&FS issue in 2018.

Despite the initial setback caused by the pandemic in early 2020, the housing market exhibited remarkable resilience from 2021 onwards, sustaining its momentum.

Looking ahead to the current election year of 2024, industry experts foresee another peak in housing sales and new launches. Puri expresses optimism, stating that all indicators currently favour a strong performance in the residential market. Following the announcement of election dates, housing demand remains buoyant across cities, indicating continued optimism among homebuyers regarding the real estate market's prospects.