By Accommodation Times News Service
Real estate industry bodies said housing sales are expected to improve following implementation of 7th Pay Commission recommendations as prices have fallen in last few years because of slowdown in the property market
Mr. Rajeev Talwar, Chairman NAREDCO
“It’s a very good decision. Hopefully it will lead to wise investment by the government staff for buying homes,”
Mr. Getamber Anand President CREDAI
“Real estate prices are at a low while gold prices are high and stock market is also up. So we expect that investment will come into the realty sector and transactions will increase”.
Mr. Vineet Relia, Managing Director, SARE Homes
The pay hike for government employees and pensioners would “help to flush in more liquidity in the market by broadening the channel of purchasing capacity of nearly one crore employees in India.”
Mr. Anshuman Magazine, Chairman and MD CBRE South Asia
“This is a positive move which will translate into growth across sectors such as e-commerce, organised retail, and the overall services industry, including the daily management of these establishments.”The act is expected to bring online and offline retailers at a level playing field and boost employment, he added. Overall, the retail sector in India stands to benefit from this announcement, including higher footfalls and consumption. In the long-term this could positively impact the warehousing and logistics segment”.
Mr. Ravindra Pai Managing Director Century
“If investment behaviour of Government employees are studied, it is seen that, majority of the investments are channelised to some secure modes. Real Estate & Gold as a commodity have drawn maximum attention from the disposable income of this cluster of working professionals in today’s market, because of some flexibility with real estate investments & high price of Gold, it is expected that Real Estate will see subsequent amount of transactions happening in next 12-24 months duration. However, unless & until the actual hike is clear, it is difficult to assess on further investment scenario. There is a chance of this hike being partially inflationary as well.”
Mr. Rahul Shah, CEO, Sumer Group
“The 7th Pay Commission is a forward step towards growth and development, as it will increase the income capacity of the community which will hence accentuate the property sales. Real estate has always been the preferred option from an investment point of view and with the higher income source, people will be more confident to look at wiser property options. The outcome of this increasing investment in the real estate sector will also generate employment across regions and further investments within the Indian boundaries will encourage the economic turnover.”
Mr. Ankush Mehta, Director, Neo Infracon
The Government of India has eased the norms for FDI in real estate last month, an important step for easing the concerns on the supply side. However, this is one sided and the norms need to be eased on the demand side as-well, especially with the high inventory levels in the market today. The recommendations of the 7th pay commission can change the fortunes of the real estate sector as there is a hefty increase in pensions and salaries for Central Government employees. The demand in the real estate sector might see a surge as a higher rate of disposable income will become available. Due to this, central government employees might begin looking at real estate as a means of investment. Central Government employees and pensioners are approximately 3.4crores in number. 50% of them will see rise in their income to tune of Rs.10, 000 per month and rest will see the rise of at least Rs.24,000 per month. With this increase in income, a rise in demand for real estate will come from the tier II and tier III cities, as most of the central government employees reside there. Also, the rent income is set to rise with the increase in rate of disposable income in the hand of employees.