by Mr. Arvind Jain, Pride Group
The dust has settled on the elections
drama and the BJP is now firmly in the driver's seat.
By and large, this is being seen as
the best possible news for the Indian real estate sector - and rightly so.
Mr. Narendra Modi has the business
mind-set, background and also determination which are called for to bring
India's entire economy back on track. What the real estate sector now awaits is
his policy approach to the issue of housing in India.
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| Mr. Arvind Jain, Pride Group. |
Now, as the country stands poised on
the verge of a major change in economic climate, it is a good time to reflect
on why boosting the housing sector is so important for the country.
Economists typically measure economic
health on various different parameters, including Gross Domestic Product (GDP),
the momentum of the manufacturing sector, inflation rate, etc. However, in
India, the appetite for home ownership can and must be included as an important
variable.
The health of the economy influences
people's desire to either invest or hold on to their money. Since real estate
is an investable asset class, forward momentum in the real estate sector
depends heavily on economic climate.
In fact, real estate is also a
priority investment route in India, because the desire to own homes is
extremely high in this country. It is also an extremely important vertical from
an economic viewpoint, because the transacting of real estate generates massive
revenue for the government. This revenue can, in turn, be used for the creation
of infrastructure, reducing national debt and generally uplifting the country.
These aspects are extremely important
from the point of view of the country's ability to attract more investments
from abroad. The Mr. Modi government is quite aware of this fact, and - in the
interest of overall economic growth - is likely to remove all or most of the
policy roadblocks that have been preventing the velocity of the housing sector
in India.
This process will involve better
incentives towards first-time home ownership, quicker approvals for residential
projects, a sharp focus on the creation of affordable housing, boosting rental
housing schemes, unlocking government-held land for development, putting
infrastructure creation on the fast lane, and many more initiatives that the
previous government had failed to address.
At the citizen level, these changes
are going to bring very tangible positive benefits. With the increased
viability of home ownership, more and more people will finally be able to live
in self-owned rather than rented homes.
Home ownership is not only a matter of
pride and financial security, but is also an important fulcrum for social
change.
People who live in self-owned homes
are more responsible citizens - they are personally invested into their
neighbourhoods, become actively involved in maintaining law and order and
generally see themselves as stakeholders rather than detached audience members.
Such citizens tend to join hands with
the government as agents of even greater change at all levels.
The effect that the policies and
actions of a government which is dedicated to boosting the economy with real
estate as an important card in the deck can have at a city, state and finally
national level must not be under-estimated.
We are now looking at the real
possibility of a revival in the economy, the infrastructure, home ownership and
interest by foreign companies who have been waiting to invest into India.
Apart from an increase in national
pride, this can result in significantly reduced loss of valuable talent to
other countries, meaning a sustained growth in house sales within the country.
The increased attractiveness of real
estate as an investment class will also result in a major revival of the second
homes market.
About the author
Mr. Arvind Jain is Managing
Director at Pride Group, Pune
For
Media Contact
Mr. Jay Kalghatgi
Client Interface - CopyConnect
Mobile: 9320142248
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