Indian developers in watchful waiting amid elections

Market in cautious mode as they await a ‘stable’ government to take power

Property seekers and investors are deferring decisions as India awaits returns of the general elections, The National reported.

With the nation anticipating poll results on 23 May, developers are holding off on launches and focusing on unloading existing units.

“Overall, it is a period when all stakeholders wait with bated breath for the final outcome,” Anuj Puri, chairman of Anarock Property Consultants, was quoted as saying by The National.

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The market is in a “cautious mode due to the general elections”, observed Shishir Baijal, the chairman and managing director of Knight Frank India. However, the second half of the year will see “increased velocities” as a result of stable interest rates and inflation being kept under control.

Indian elections commonly see political candidates using their real estate holdings to defray their campaign expenses. Current circumstances may well promote this phenomenon, analysts said.

“It is no secret that in the past, funds parked by political parties in real estate were sucked out of the system to finance their poll campaigns – and the market is currently facing a serious liquidity crunch,” noted Puri. “Though new laws now overtly cap the amounts that political parties can accept for campaign donations, they obviously don’t cover all possible avenues of access.”

The ideal outcome of the polls would be a “stable government,” said Niranjan Hiranandani, the managing director of developer Hiranandani Group.