Indian real estate sector deserves attention, for its proper health has a direct impact on India's economic health. It is no secret that the sector has been going through challenging times for the past couple of years. It was in dire need of proactive policy changes to take it out of the red zone.
The sector's importance cannot be over-emphasized - it is the second- biggest employment generator after agriculture, and contributes between 5-6% to the country’s Gross Domestic Product (GDP). The political environment of a place greatly affects the real estate sector in India. Here are mentioned some of the effects that political influence have n the real estate market.
•Political instability discourages investment, if the ongoing political competition is anything to go by, most investors are likely to go slow on investment until the political temperatures cool down.
•the expenditures made during the elections also greatly affect the real estate industry. Inflation affects the prices of goods. One will find the prices of sand, ballast, cement, much higher price than usual. It also affects the price of fuel, which in turn drives the prices of other commodities up.
•Depending on the political era, the ruling party by stamping its authority on commercial banks greatly determines access to capital, bearing in mind that the construction sector relies heavily on capital from these banks to thrive.
•taxation which is one of the main element of the political environment, either puts money into people’s hands or takes it away from them. A high tax on imported goods discourages investments and increases the cost of locally available materials. The impact of taxation on the construction sector depends on the government’s decision to increase or reduce taxes on building materials.
•The establishment of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) has numerous advantages and key amongst them are increased transparency, professional management, a steady stream of dividends and access to an alternative source of capital. Increased requirements for public disclosures and a likely rise in institutional investors should see transparency and governance improve, and also necessitate the need for professional management.
Sanali group is one of the most valuable and trusted real estate development companies. It is a pioneering developer of many high profile projects. The sanali group has achieved proven competencies in property, IT parks, shopping malls and retails and hospitality and leisure.
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