Realty sector slows down in run up to elections

Mangaluru: An increase in political awareness among the masses, in addition to the model code of conduct stretching to almost two months, has resulted in a drastic slowdown of the real estate industry in Mangaluru.
D B Mehta, president, Confederation of Real Estate Developers’ Associations of India (CREDAI), Mangaluru, told TOI, that on the policy side there are certain issues which led to this. “Revision of zonal regulation that was on the cards has been deferred by two months. Both Mangaluru Urban Development Authority (Muda) and Mangaluru City Corporation (MCC) are run by administrators. With the deputy commissioner busy with election duty, decisions are being delayed in both these bodies. The government decided not to make property cards mandatory till May 15, but there is a delay in the issue of property cards along with software issues.” he said. “We are expecting a limbo from May 15 till May 23, as no registrations can take place without property cards. If for 10-15 days, properties are not registered, especially apartments built and sold, the problems faced by the industry will only worsen. On property cards, CREDAI will seek an extension from the deputy commissioner, after the polling date of April 18,” said Mehta.

Explaining issues on the business front, he said, “Home buyers are adapting to a wait and watch policy and want the formation of a stable government, irrespective of the party. Stability is important for economic growth and development. Enquires for commercial and residential properties have dropped by 75 per cent, indicating that people are politically aware of issues, and economic decisions are now being made based on the political outcome that is expected. This trend was unseen and unheard of, even during the last Lok Sabha or assembly polls,” said Mehta, attributing this trend to the social media.

While many clients have put investments on hold, Mehta feels it would be ideal for the nation to go for polls in just three phases, and complete the entire process in 15-20 days. “The economy is getting affected. Once bookings reduce, the flow of funds gets affected, thus having an impact on execution,” he said.

“Real estate slowdown has been recorded across the country since March, as the government brought down the GST rates, which is being implemented from April 1. People have thus postponed investments on purchase of homes,” he said. “Even at the national level, there is a slowdown visible in the collection of income tax in the month of March 2019 compared to March 2018, and the government is looking at a revenue shortfall of almost Rs 1 lakh core,” Mehta explained.