General Elections: Will 2024 see another housing sales surge like 2014 and 2019?

Election's housing impact: The intersection of general elections and the residential real estate market has historically yielded notable trends, and all eyes are now on 2024 as experts speculate on the potential for another peak. Previous election years in 2014 and 2019 witnessed surges in housing sales, and current indicators suggest a similar trajectory may unfold, according to a report by Anarock.

Election-driven peaks

In 2014, amidst decisive election results, the housing market soared to new heights with approximately 3.45 lakh units sold and 5.45 lakh new units launched across India's top 7 cities. Similarly, in 2019, post-sector slowdowns attributed to structural changes like DeMo, RERA, and GST, housing sales reached approximately 2.61 lakh units, with new launches totalling 2.37 lakh units.

Anuj Puri, Chairperson, Anarock Group, highlights the role of election outcomes in shaping homebuyer sentiment, stating, "A major factor driving the housing market's phenomenal performance in 2014 and 2019 would have been the decisive election results. For homebuyers, it was an end to fence-sitting and a confident move to 'buy' positions."

Market buoyancy levels

Analysing price trends in these election years further highlights the importance of political stability on market dynamics. In 2014, average prices in the top 7 cities rose by over 6 per cent, while 2019 saw a more modest 1 per cent increase, indicating varying degrees of market buoyancy.

However, the journey to potential resurgence in 2024 has been marked by challenges and transformations. The period between 2016 and 2019 witnessed a market slowdown due to policy reforms and the NBFC crisis, dampening investor confidence. Yet, against all odds, the housing market exhibited resilience from 2021 onwards, with momentum continuing into the present.

Are economic predictions supporting growth?

As anticipation builds for the 2024 election year, several factors contribute to a favourable outlook for the residential real estate sector. Most regulatory reforms are firmly in place, marking the culmination of a tumultuous period of market adaptation. Furthermore, optimistic GDP growth projections by international organisations like the IMF, controlled inflation rates, and clean balance sheets of developers post-pandemic instil confidence amongst stakeholders.

Notably, developers have capitalised on growing demand, closing substantial land deals and expanding their presence into new territories. With established players demonstrating financial stability and a willingness to innovate, the stage is set for another potential peak in housing sales and new launches in 2024, according to experts.