Now that Modi sarkar is firmly in place for the next 5 years, what would be the likely impact on real estate prices in Mumbai?

One possibility is that if the stock market rallies & the returns there are good, will investors shift their monies to the stock market for better returns given that the real estate prices are already quite high & are unlikely to give high returns. If investors shift monies will real estate prices drop?

Second possibility is foreign real estate funds/investors might feel that India's economy/Modi's policies will lead to higher returns than other locations abroad. They will invest (and quite sizable funds) in real estate projects giving builders much needed cash. This will keep prices at high levels or maybe go up even higher.

What do you feel...
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  • In my view, the first thing Modi has to do is build infrastructure.. And what I mean by infrastructure is social infrastructure like roads, railways, for better connectivity. The moment he does that, the prices in Mumbai, which are extremely high because of poor connectivity issues, shall fall. Those in the far suburbs shall either increase or stabilize. That's exactly the strategy adopted by the BJP politicians like Lodha etc who have put their newer and larger projects in Dombivali, etc on the outskirts of Mumbai.

    Global investors are a bit wary after the HIRCO debacle where they lost all their money.. They shall tread carefully. So I do not see a big rush of money entering into the real estate market. There are already several PE investors (nearly multiple times of what money is currently lying on the sidelines) who want to remove their money from the Indian real estate market.

    The current stalemate in prices is only partially due to liquidity. The stalemate is more due to affordability and demand-supply gap. There are very few end customers who are buying at the current prices. Resale market too is dead. Also BJP isn't as corrupt as the NCP / Congress combine so prices shall only be stable or fall as the politicians of the parties who have lost shall remove their money and invest elsewhere..
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  • Here's one of the many articles I have based my view in the earlier post upon...

    A stable Modi sarkar! What's in store for the real estate sector - The Economic Times

    Of course the media is heavily funded by real estate through advertisement revenue (I have personally seen Hindustan times, TOI etc take flats from Lodha and other builders in return for advertisements), so they shall never ever talk about prices correcting or any news detrimental to the builder community... Its hard for the dogs in media to bite the real estate hand which feeds their mouths...
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  • Look at what happened historically where development has happened. Look at Ahmedabad - though prices are stable now for last 2 years but have risen drastically once development happened due to demand from people of city (end use and investment), investors and better infrastructure. Suburbs would see better rise due to better infrastructure but having said that town should also see steady return.
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  • Investors and speculators please open your eyes:

    If someone has seen the BJP manifesto, they will know that the RE prices will remain stagnated or decline as long as BJP is successful in its stated high growth, high infra and good governance agenda.

    Remember the high prices are artificial due to the fact that very few sectors/cities have good infra or transportation. For example look at DLF projects NTH and those on GC road, the reason for one selling for 4k psft and the other selling for 20k+ psft is because of the infra, jobs and urban facilities nearer to GC road.

    Under the new govt. amount of infra, roads, bullet trains, metro tracks, etc and other developments will result in a big blow to these artificial prices in a few pockets in urban areas.

    For people who are still in their dreams think a good govt will result in higher property prices, please see the price trends in Ahmedabad over the last 5 years.

    Also, do not forget the plans to start the 100 new cities project... it will suck up a lot of investor money and end user money.

    For people who think "100 new cities" is a day dream, please read about the GIFT city project in Gujarat. It is an international showcase city nearing completion in a matter of few years.

    Good governance, Better infra and low corruption always results in affordable home prices and reduces the demand-supply gap. See the example of real estate trends in Germany etc which are not land constrained but have good governance.
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  • I really wish property prices remain stagnant or correct so that middle class (including myself :-)) can afford them. But what about the huge money made by people in stock markets over last 6 months ? Also stock markets are expected to continue with bullish trend at least till budget is announced..
    Mumbai investors will plough this back into realty only I feel. Then prices won't correct, but will go up even further. With development, growth, higher GDP, higher disposable income, property will also go higher IMO.

    If you compare with highly developed cities of the world, property is not at all affordable there for ordinary middle class. Either they stay on rent in main city or have own house in distant suburbs and commute long distances. Although with good infra etc, the quality of life is not compromised, unlike in India now.
    I feel people have craze for Mumbai property like Indians have for Gold. When it goes down they will buy more and hold, till it stabilizes. When this is busted, maybe property rates will also correct.
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  • Yes i think my frnds here are mixing short, medium and long term. Though trend on long term would be rationalisation of prices which may lead to rise in some locations while being steady in some locations but in short and medium term price is expected to rise and that too little more in suburbs than town. New cities etc is a very long term game and should not have much effect right now.
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  • Originally Posted by humble_guy
    Investors and speculators please open your eyes:

    If someone has seen the BJP manifesto, they will know that the RE prices will remain stagnated or decline as long as BJP is successful in its stated high growth, high infra and good governance agenda.

    Remember the high prices are artificial due to the fact that very few sectors/cities have good infra or transportation. For example look at DLF projects NTH and those on GC road, the reason for one selling for 4k psft and the other selling for 20k+ psft is because of the infra, jobs and urban facilities nearer to GC road.

    Under the new govt. amount of infra, roads, bullet trains, metro tracks, etc and other developments will result in a big blow to these artificial prices in a few pockets in urban areas.

    For people who are still in their dreams think a good govt will result in higher property prices, please see the price trends in Ahmedabad over the last 5 years.

    Also, do not forget the plans to start the 100 new cities project... it will suck up a lot of investor money and end user money.

    For people who think "100 new cities" is a day dream, please read about the GIFT city project in Gujarat. It is an international showcase city nearing completion in a matter of few years.

    Good governance, Better infra and low corruption always results in affordable home prices and reduces the demand-supply gap. See the example of real estate trends in Germany etc which are not land constrained but have good governance.


    In addition, the NCP/Cong is definitely set to loose in upcoming assembly elections in 6 months. Many of the realtors in Maharashtra, especially in Pune are NCP backed. Plus, one more round of election spending in Maharashtra. We are definitely in for correction.

    And the most important thing - regardless of the political impact, affordability is the most important factor which is clearly not in realtors favor.
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  • Will real estate correct, or will it rise, it seems to depend on whom you speak to. It also seem to depend your involvement with it. Some people want the prices to correct so that they can purchase a home, some like me wanted to upgrade to a better home, yet again there are other that are invested in the RE market and would like the see returns on their investment, and would like the market to continue its appreciation, because we live in the information age and are bombarded information from all sides, the person who want to buy a home tends to be biased and partial towards data and information trends, that supports his hope and desires that RE will correct, and a person who is invested in RE similarly collects data and informative trends that supported his desire/ hope for RE appreciation. I myself waited 4 years for the Mumbai market to correct,(read Andheri/Oshiwara west area) before deciding to invest in Pune (under construction) for end use. Reason i just couldn't handle the stress of waiting.
    The Ground realities of RE are truly Baffling!
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  • Originally Posted by humble_guy
    Investors and speculators please open your eyes:

    If someone has seen the BJP manifesto, they will know that the RE prices will remain stagnated or decline as long as BJP is successful in its stated high growth, high infra and good governance agenda.

    Remember the high prices are artificial due to the fact that very few sectors/cities have good infra or transportation. For example look at DLF projects NTH and those on GC road, the reason for one selling for 4k psft and the other selling for 20k+ psft is because of the infra, jobs and urban facilities nearer to GC road.

    Under the new govt. amount of infra, roads, bullet trains, metro tracks, etc and other developments will result in a big blow to these artificial prices in a few pockets in urban areas.

    For people who are still in their dreams think a good govt will result in higher property prices, please see the price trends in Ahmedabad over the last 5 years.

    Also, do not forget the plans to start the 100 new cities project... it will suck up a lot of investor money and end user money.

    For people who think "100 new cities" is a day dream, please read about the GIFT city project in Gujarat. It is an international showcase city nearing completion in a matter of few years.

    Good governance, Better infra and low corruption always results in affordable home prices and reduces the demand-supply gap. See the example of real estate trends in Germany etc which are not land constrained but have good governance.


    everybody has there own set of examples...BTW what are the prices in GIFT city and who is building this tower....
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  • Originally Posted by realpune
    In addition, the NCP/Cong is definitely set to loose in upcoming assembly elections in 6 months. Many of the realtors in Maharashtra, especially in Pune are NCP backed. Plus, one more round of election spending in Maharashtra. We are definitely in for correction.

    And the most important thing - regardless of the political impact, affordability is the most important factor which is clearly not in realtors favor.


    Its affordable if you are not looking for property in central for example in NCR....Sohna road extn, Manesar....Greater Noida I'm sure you can find properties from 35L to 70L.....problem starts whe we need our choice of property in developed area today.....but if you are just looking for affordable property its very much available today as well and we don;t need to wait for any magic here.....just my PoV....
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  • Results came out on 16th May 2014 . Did anyone see any increase in their personal wealth ( Except few Stock traders , who won jackpot if they were long). Does anyone see strong visibility of earnings growth over the next one Year. I am sure 99% will Answer NO.

    Real Estate does not move on sentiments , stocks do. RE has a big ticket size and stocks don't. RE is not liquid but stocks / commodities are and so the answer is a No. It does not matter who came or with how many seats, its demand/supply so election outcome in my view is not likely to have any major uptick in prices cos ppl are not left with much of money as houses and prices of food etc have gone over the roof.
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  • With decisive mandate to NDA, we might see a reacceleration in the DMIC (Delhi Mumbai Industrial Corridor), as almost all the states that lie on DMIC are now BJP controlled (or will be by the year end: MH, GJ, RAJ, HR, DEL). Now i dont know exactly what the current status is, but I think the initial approvals and plan clearances will happen more quickly than before. This should augur well for real estate in in industrial towns/regions lying on the DMIC, such as Bhiwadi, manesar, neemrana, etc.
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  • Wishlist of builders from modi sarkar...

    Source: 99acres

    We are expecting key policy shakeup for more transparency Mr Modi, say builders
    By Debolena Bose
    Monday, 19 May 2014 12:27

    The real estate movers and shakers have reposed high hopes on the new government. They believe that the Central government will bring about key policy changes which will enable speedy implementation of projects and facilitate overall transparency in the real estate sector. As a consequence, buyer demand will surge, investors will eventually shed their negative sentiments and overall housing will become more affordable.In other words, the market will become viable for buyers, investors and builders.

    Here we bring you a cross section of voices:


    Rupesh-GuptaRupesh Gupta, Director, JM Housing

    This year has seen a few setbacks in the real estate sector; from a lower demand to increasing home loan rates and from rising inflation to some unexpected wrong doings in the sector. Now since a new government is in place; we will see a lot of work being carried out especially in view to encouraging transparency in the sector and lowering certain interest rates so that housing in general becomes cheaper in the sector. The end user market was pretty much unaffected during the election season as end users do not worry much about the changing trends or political condition of a country, although investor activity will now become quick.

    Sushant-MuttrejaSushant Muttreja, CMD, Cosmic Group

    In a competition, there is always a winner and a loser. For a voter, the most vital aspect is the development of the nation, which basically means the development of the contributing sectors and industries. Real estate is the highest contributor the Indian GDP and employment; which means that the focus of the new government must be directed here. Clearing of old bills and bringing new ones must be on the cards along with certain policies for making procedures crystal clear and easy for the customers to gain faith in the sector. After a few months from now, we all will definitely see a lot of increase in the investment and demand for property.

    Pankaj-Kumar-Jain
    Kamal-BatraKamal Batra, Chairman, Buniyad Group

    BJP coming into power after almost a decade means that people had some other views in mind about the development of the nation. Whenever a new government is formed, there exist a sudden movement in the way of working of people and the motivation levels are higher. There were a few bills that were standing on the verge of a decision which now will definitely form and parallel we will see new laws been formed that will allow a smoother flow of work in the sector at all levels. The election period had paused the market for a bit for the investors; which now will change significantly. The end user market on the other hand will keep on flourishing as the demand increases and interest rates drop.

    Pankaj-Kumar-JainPankaj Kumar Jain, Director, K World Group

    We expect that the new government will reboot the regulatory framework. In particular, NCR's real estate market will benefit from fast-tracked approvals for new projects, which will increase supply and in keep the city's property rates rational. Also, The BJP is in now in a position to boost affordable and mid-income housing projects, which would have positive ramifications for a city like Ghaziabad and NCR.

    We feel that a stable government will lift the sentiments of the investor community, which has a strong impact on residential and commercial property sales. We expect the new government to be more efficient and corruption-free in the matter of granting approvals to real estate projects. We feel that the formation of a stable government not dependent on coalition partners will hopefully mean faster decision making and economic reforms which will bring in more transparency in laws and regulations and make the builder more accountable thereby reviving the investors trust in the builder which has taken a dip in recent times.

    Many foreign investors have so far refrained from investing in the Indian realty sector because of the political instability, mismatched regulation, and bureaucratic mess. We strongly feel that the new government will have the chance of making Indian real estate more investment-friendly and lucrative, which in turn in the long run will help real estate developers to meet their financial requirement as availability of funds will ease and interest rates are expected to come down as inflation cools.

    Rupesh-Gupta
    Kushagr-AnsalKushagr Ansal, Director, Ansal Housing
    It’s been a decade now since BJP’s been into power; surely they will be hungry to transform things in the economy. Several pending bills such as the real estate and land acquisition bills will be finally put to a decision. We might even see a lot of new policies and laws for a better working in the sector. With polling season complete, most investors who were waiting for stability in the market will now resume with their investments. The market for end user was neither affected earlier nor will it get affected now. It is just that the demand will increase at a macro level. Prashant Tiwari, CMD, Ajnara India Ltd.

    Any new government forming at the centre brings about a certain change in the outlook of an industry. Every government has certain plans for sectors and industries individually in their manifestos; which will be there for our sector as well. A lot that is being done by the last government will be used as a platform to improve things in this sector by the new government. The already existing demand will grow manifold in the upcoming quarter as the confidence levels of the customers will be higher now.

    Deepak-KapoorDeepak Kapoor, Director, Gulshan Homz

    The way elections have been fought and won by BJP; it showed a lot of promise from their end and how they plan to bring a revolution in the country. Even this sector will receive quite a lot of exposure this time as it has been a significant contributor to Indian growth. Due to the polling season a lot of customers were held back as there existed a lack of confidence amongst them. Now, people have themselves all set to invest again as a new government has setup at the centre. There will be a prompt decision making by the government in order to promote the sector.

    Arvind-SinghArvind Singh, MD, KRasa Group

    In the run up to the elections 2014, the real estate market had been a bit slow as inflation was sky high and demand was low. Now that a new government has setup, things will definitely start to pick up pace. There will be a lot of changes taking place soon in the sector as new policies will take over that will bring about a sigh of relief for the people of this sector and eventually the customers. The beginning of a new government will also mean that many foreign nations will be getting ready to invest in the country as well.
    Kushagr-Ansal

    Arjun-Preet-Singh-SahniArjun Preet Singh Sahni, Executive Director, Le Solitairian Group

    A stable government would improve the prospects of various industries, including real estate. All the real estate stocks have already risen as investors expect a revival. Investment will further increase once the new government starts initiating policies pertaining to real estate reforms as expected. A stable government in Centre can bring the economy to a high-growth trajectory. It can also bring into effect policies that increase the disposable income of the end-users making them capable of buying into world class projects being developed in the country.

    RK-AroraRK Arora, Chairman & MD, Supertech

    BJP’s election manifesto is development oriented and there cannot be a development without the participation of real estate industry. The existing real estate policies have been framed without seriously considering the objections and apprehensions of real estate industry. Developers Associations have been from time to time making various suggestions to make the industry more transparent and capable of providing affordable housing to the masses. Looking to its contribution to the GDP, the industry look to the new Government at Centre to frame growth oriented policies.

    Suninder-SandhaSuninder Sandha, Director, Horizon Concepts

    The buoyancy in real estate sector can be attributed to numerous factors such as IT, hospitality, retail sector etc. Earlier, the realty sector was entrenched in tier 1 cities with almost every investor ready to venture. But of late, with coming of new industries, airports and foreign institutions in tier 2 cities the demand has gone significantly high.

    Transparency is a mark of trust and BJP’S agenda has always been very transparent and lucid over the years so expecting a liberal policy for real estate market won’t be a big surprise. One of the major factors is FDI which has been the talking point and BJP has always been in favour of it.

    Investment is a matter of short and long term goal which revolves around a lot of factors like budget, bank policy, systematic planning, monetary policies by RBI to name a few. Real estate sector has grown despite the gloomy economy situation and projected to grow exponentially. Indian residential real estate price is poised to grow at a 10-12% over next year. There is a paradigm shift towards commercial sector too and with more bank loans available at a good rate coupled with leasing options the demand among investors has gone sky high.
    Sushant-Muttreja

    Ashok-GuptaAshok Gupta, CMD, Ajnara India Ltd.

    Once a new government sets up, there exists a very rapid shift in gears of the demand in real estate sector. People tend to pause investments before and during elections; and now the sector will see the demand growing again. We will definitely see certain change in the policies pertaining to transparency in real estate. Once a new government sets up, there exists a very rapid shift in gears of the demand in real estate sector. People tend to pause investments before and during elections; and now the sector will see the demand growing again. We will definitely see certain change in the policies pertaining to transparency in real estate.

    Ratan-HaweliaRattan Hawelia, Founder & Chairman, Hawelia Group

    We expect now efficiency and fast approval process and easier bank funding which have been two major concerns for the industry. We believe that the sector will be given industry status which will ease all fund inflow. We are hopeful of positive turnaround with new policy implementations.

    Suninder-Sandha
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  • What an amazing farce to see those statements of the developers... Not one of them has even bothered to think about the customer. None of them talk about anything to increase affordability, ensure strong regulation of the sector and look at the needs of the end customer.. What a shame. Where is the customer focus of these developers????
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  • This is what I had already posted few days ago :-

    First of all, RE has never been matter of interest for BJP, be it earlier or be it now. Ofcourse, I don't deny that there are builders who are close to BJP but RE as policy of investment for BJP is not there.

    Second is BJP has plans to develop 100 planned cities rather than spending more money on demolition & rebuilding of existing cities. This simply means that engine of growth will be driven towards areas where high amount of commercial & industrial activity is planned (will let you know more details as soon as I get it). This directly has impact on existing cities.

    Third, is the emphasis is world class, high speed public transport. This would mean that cities can expand horizontally & away from established localities. In short, creation of self contained cities & satellite cities.

    Fourth, Modi is die-hard fan of China's planning & infra & he has already sent a team of urban experts to China to learn & see to it how suitable things can be implemented in GJ. Now his plans are to look at this on India perspective.

    Fifth, the BJP has 2 major agendas :-

    a.) Try to bring US$ to 50 INR which will help cut CAD in real terms & reduce import bill, especially oil.

    b.) Plan manufacturing based areas across the country connected with high speed freight corridor which will have direct connections to 4 major ports :- Mumbai, Kandla, Chennai & Kolkata. This would drive up exports & cut transport cost & time. Industries set up in this dedicated areas shall have labour policy similar to China alongwith 24x7 low cost power & tax benefits. The areas around such industrial hubs shall have mass affordable housing for the employees working in these sectors.

    Sixth, BJP has made 'Affordable Housing' as its election manifesto for urban India. This would eventually mean private builders will have to reduce their costs, else buyers will buy flats directly from Govt. (Yes, BJP plans to have a RE arms of the Govt like that in Singapore).

    Last but not the least, the builders are holding on today just because of the money pumped in them by Congress, NCP & likes. When these parties will now pull out, how will the builders sustain ??

    If you don't believe, look what happened in 1999, when BJP-SS came in power. The RE prices in Mumbai crashed by over 50%.

    Btw, don't forget that the voters who form one of the major chunk of BJP are those who are exploited by the builders & BJP will not betray their voters.

    Overall, BJP exposure to RE is almost nothing when compared to Congress-NCP.
    Even in Pune district, all the townships are owned by Congress-NCP & even the school inside it is named as Pawar international school. Be it Megapolis, Nanded City, Magarpatta, Amanora, Megapolis or even the illegal Lavasa.
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