and increase in job confidence, Dutt added.
Experts agree that though it is unlikely for the change to happen immediately post-election, it will certainly improve the investor confidence.
“Post elections, if the economy looks stable, many fence-sitters would like to invest. There is a shortage of people willing to buy houses. People who want to buy a house for investment purpose would go in for it only when they have job security which comes from a stable government… if we see a positive mandate from the new government, we are going to witness a good third and fourth quarter,” said Getambar Anand, chairman and managing director, ATS Infrastructure, and president-elect, Credai.
Anand added that the stability will bring down the cost of funds, which is currently very high and would make it affordable for small developers.
Currently, among other challenges the sector faces, unsold inventory and high interest rates are the most significant ones. There is a liquidity crunch in the market where either people have no money to buy land or developers have siphoned off money from one project to another and are now struggling to complete projects and deliver.
Also, there are investors who may have sufficient funds but they are not willing to pump it in the sector due to the current uncertainty. Dutt said that liquidity crunch is likely to remain for a minimum of another 6-12 months irrespective of political results.
“But, all the same, the sector is beginning to look very attractive in terms of kind of opportunities that are being presented and valuations most are asking. Unstable political climate, if witnessed may hold investors for some more time, but opportunistic and futuristic investors may further capitalise on this,” said Dutt.
The revival would also depend on structural and fundamental reforms initiated by the new government. “Structural reforms are required and the BJP is promising that. Moreover, in general elections if you have a leader who takes decisions, people are generally bullish. But developers should keep in mind that margins will not be same as before,” said Sunil Agarwal, MD, Black Olive Ventures, a real estate consultancy. “The current market is for products priced between Rs 40-70 lakh.”
“Affordability is a big issue currently. So I don’t see a boom but I do see a revival of the sector, reflected only by November-December. If Narendra Modi forms the government, we would see a revival but if there is