In line with the 7th Pay Commission recommendations, the Modi-led NDA government decided upon an overall increase of 23.5% for one crore government employees. The announcement regarding the Union Cabinet’s clearance on the recommendation was made by Finance Minister Arun Jaitley on June 29, 2016 at a press conference. This has come as a ray of hope for the government employees and pensioners.
The 7th Pay Commission will also boost the Indian real estate industry. As the affordability and home loan eligibility of the public sector employees improves with increase in their salaries, they are expected show renewed interest in the real estate projects. Reports prove that immovable properties like real estate have been the favorite investment venture of government officials. And now that the overall urban spend will be improved, the increased demand for affordable homes in different parts of the country will shoot up.
In the last 6 months, a number of real estate builders came up with their projects targeted at the government employees. One of the recent projects in this category is Ajnara Khel Gaon. It is a sport-centric project in Greater Noida West exclusively for the government employees. A few months ago, Supertech launched a similar project by the name of Supertech Officers Enclave which was a luxury project for public officials. Amrapali had also introduced its project Amrapali Adarsh Awas Yojna for them.
Reports show that a majority of public sector employees look to buy affordable homes. And now the demand for such affordable homes in NCR, Navi Mumbai and Pune are expected to ameliorate. As reported by Business Standard, the CEO of JLL India talked about the positive impact of the 7th pay commission on the real estate demand and said that an increase in salary will induce the sentiment of home ownership among the employees of government machinery, though they are generally conservative regarding large financial investments.
Pricey cities like Mumbai, Kolkata and the luxury areas of metropolitan cities will not witness much of an impact. However, real estate markets of the affordable cities see a fresh hope in the acceptance of this new panel recommendation.
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