The real estate sector in Punjab is likely to witness sluggishness in the run up to Assembly elections in the state next month, with investors expected to adopt a wait-and-watch policy with regard to new investments till the next state government comes to power, say experts.
The maximum impact of the upcoming elections is expected to be visible in new and upcoming residential projects, which still require statutory approvals from various government authorities to take off, as investors and financiers will be reluctant to infuse money into these projects in the wake of the Code of Conduct coming into force, real estate experts said.
The Election Commission of India yesterday announced that elections for the 117-member State Assembly in Punjab would be held on January 30.
Spiralling interest rates, coupled with slackening demand for property, has already made a significant dent on the property market in Punjab, with sales prices of real estate products dipping by 10-15 per cent in the past six months, they said.
“Investors do stop or become reluctant in investing in new projects during state elections as they wait for formation of a new state government, which may go for changes in policies for the real estate sector,” CREDAI (Punjab) President Kulwant Singh told PTI.
However, he said the elections will have no impact on ongoing projects.
The country’s leading real estate developer, DLF, had also recently opined that the real estate industry faced a “little bit” of a slowdown during elections.
“There could be an impact… People become a little wary of investing in the real estate market during elections… They want to watch stability (till the next state government is formed),” DLF India Executive Director (North) Rahul Mehta had said.
Apart from this, financial institutions have already seen an up to 20 per cent drop in credit offtake by real estate developers, especially in Chandigarh, Mohali and Panchkula, in the past four months.
“Investors are switching over to a wait-and-watch policy concerning real estate buying,” HDFC Joint General Manager (Punjab, Haryana, Himachal Pradesh) P C Srivastava said.
Non-Resident Indians (NRIs), who are among the key players in the real estate sector, also stay away from the property market till the next government comes in.
“NRIs will refrain from buying new properties in Punjab until the new state government is formed,” NRI Sabha (Punjab) President Kamaljit Hayer said.
Nevertheless, the real estate experts avowed that whichever political party forms the next government, it will continue to support the property market through its policies.
