Impact of Lok Sabha Elections On Hyderabad Real Estate

---

Jun 12, 24

By Hallmark

With the 2024 general election result being released recently, its impact on Hyderabad’s real estate sector is one of the most discussed topics in town! Chandrababu Naidu becomes the Chief Minister of Andhra Pradesh for the fourth time; hence, a stronger focus on infrastructure and pro-business policies is expected in both Telugu states, particularly in the capital city of Hyderabad. However, real estate experts are assuming that with the revival of Amravati, there may be some sort of migration of residents and businesses to Andhra Pradesh, leading to some adjustments in the real estate market in Hyderabad. Let’s dive into some of the positive impacts of the election on Hyderabad real estate.

1. Infrastructure and Pro-Business Initiatives:

Post the Lok Sabha election, it is assumed that there might be an increase in commercial real estate in Hyderabad due to the renewed emphasis on infrastructure development and pro-business policies. Smooth connectivity and streamlined regulations could encourage more businesses to establish operations in the city, thereby boosting the commercial real estate market.

2. More IT Companies Will Come Up:

The election results can pave the way for the growth of many IT companies and industrial sectors. This growth may increase the demand for commercial real estate, particularly in technology parks and industrial areas.

3. Boom in Housing Sales:

According to the reports, the period between 2021 and Q1 2024 saw an immense rise in housing sales, with multiple new residential projects being launched and sold. We can assume that this trend will continue after the Lok Sabha elections as well, leading to a booming real estate market.

4. Rise in Housing Prices:

Hyderabad's strong real estate market fundamentals are shown by the city's continuous improvement in property values, which includes a general price rise and noticeable increases in areas like West Hyderabad. Housing prices are rising, which is encouraging for both homeowners and investors, despite possible obstacles.

Challenges that can pose a threat to the real estate market in Hyderabad:

1. The Andhra Pradesh Factor:

A day before Chandrababu Naidu was set to take an oath as the Chief Minister for the fourth time, he announced that from now on, Amravati will become the capital of Andhra Pradesh. This decision by the CM is considered to be one of the chief concerns post-elections that can lower the growth of the real estate market in Hyderabad. As predicted by real estate experts, the number of real estate launches may stabilize, as investors and buyers seek competitive opportunities in Andhra Pradesh. The emphasis on Amaravati, which is expected to see substantial development along its new growth lanes, is what is driving this change. Prashant Thakur, Regional Director and Head – Research, ANAROCK Group, stated that "Andhra Pradesh's potential development can be a double-edged sword for Hyderabad real estate. However, the overall impact is likely to be positive as Andhra Pradesh's growth could spark a ripple effect, attracting businesses and investors to the entire region."

2. Out-migration of businesses:

Though the path of real estate in Hyderabad seems promising, there are a few obstacles that can come down the road to its success! There are possibilities of some outmigration of residents and businesses if they receive alluring incentives from Andhra Pradesh. According to Anarock Research, this may deter some investors from investing in Hyderabad, which could result in a brief correction in the city's real estate values and a possible decline in the commercial real estate market.

Conclusion

Investors, developers, and homeowners must remain aware and adjust to changing trends as Hyderabad's real estate industry negotiates the post-election landscape and should closely monitor the events happening in Andhra Pradesh. The interdependence of political developments and real estate dynamics highlights the necessity of adopting a strategic strategy to effectively use possibilities and manage risks in a dynamic market environment.