REALTY : 7th Pay Commission to Boost Realty

With the recent announcement of increase in pay and allowances of government employees from January 1, 2016; Indian real estate sector is sure to see a surge in demands. The hike has been recommended at 23.55% and the minimum maximum salary caps have been set at 18,000 & 2,25,000 per month respectively. A total of 47 lakh serving government employees and 52 lakh pensioners will benefit from this. 

What the sector gains?

The very first gain is obviously the influx of capital it will result in.  A huge chunk of the buyer group today comprises of government employees. With their pays expected to go up by as much as 23.55%, we are sure to see a spike in the people ready to invest across the sector. The need is always there because they have been using government houses as their residences throughout their period of service but once retired, they would be required to vacate the same.  

RBI has already kept rates unchanged allowing the market with an opportunity to regain its lost stature and stabilize. This coupled with the increased purchasing power of close to 1 crore families is sure to reduce on the supply demand gap.

Reduced supply demand gap is sure to encourage more and more fresh launches in the queue. This will mean fresh projects coming in through the channel with fresher ideas and innovative concepts.