New real estate project launches on hold until election season ends

The ongoing Lok Sabha elections have put a temporary halt on new real estate launches as developers across the country choose to not launch any major residential project until the poll results are declared. This, they say, is primarily to be able to adjust to the policy framework of a new government. 

While April is generally a favoured period to launch fresh projects, most developers in all key markets including Delhi, Mumbai and Bengaluru have put fresh launches on hold. “Political uncertainty and expectations from the new government, whether that might be help to ease the financial burden or a new policy on housing, is the reason that developers desist from launching a project when elections are around,” Sagar Saxena, Project Head, Spectrum Metro said. 

Some developers also claim that real estate witnesses different cycles under NDA and UPA rule. “Whatever political analysts say, we are keeping our fingers crossed. The realty business works differently under the two parties (BJP and Congress). It is going to be more difficult if the verdict is for a hung assembly. So, it is better to wait and watch till the election are over,” a leading developer based in Noida said. 

It is not just developers, but also buyers who keep on postponing purchases during election season. “Many developers postpone their launches around elections as sales in the new launches and even under-construction houses go down whenever an election is near. This trend was witnessed even in the past, as well as the last elections in 2014,” Pankaj Jain, managing director, Realistic Realtors said.

“Buyers and developers alike start expecting new policies regarding real estate. The new government might announce sops for buyers and developers, exemption in certain taxes. These factors automatically comes to mind and if the launch is near the election then it is better to start once the election process is complete and a new government is formed,” Ashok Gupta, CMD, Ajnara India Limited added.

Another reason cited by the developers is the lack of funds. “Funding flow is not smooth during election time. Once the election is over, funding also will bounce back to normal. That is also a major reason why developers postpone their launch,” another developer from Gurgaon said.