According to the department of industrial policy and promotion) data, foreign direct investment (FDI) into the construction sector - townships, housing, built-up infrastructure - declined to about $1 billion in April 2013-February 2014 from $3.1 billion in April 2011-March 2012.
From April 2000 to February 2014, cumulative FDI of $23.1 billion has come into the realty sector, 11 per cent of total inflows.
Currently, 100 per cent FDI is permitted through the automatic route in the sector, which cover townships, housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional-level built-up infrastructure.
Recently, DIPP had moved a Cabinet note, seeking relaxation of riders on FDI in the sector but no decision was taken on it by the outgoing government.
Anuj Puri, chairman and country head, JLL India, a real estate consultancy, said, "An improvement can definitely be expected in the near-term investment sentiment."
According to Puri, domestic money is in search of good investment options and investors are eager to strike a deal at attractive valuations.
Also, foreign money has been waiting in the wings and awaiting political stability before entering India. "In that respect, a clear majority is the best possible scenario."
Currently, at least $1.8 billion worth of funds were in the process of getting raised, he said, adding, with the BJP now in the driver's seat, we expect the space to see a lot more traction and many investors to enter the country.
However, property prices are not likely to show any sharp upward movement immediately.
Sanjay Dutt, executive managing director, South Asia, Cushman and Wakefield, also said, "A stable government will lift the sentiments of the investor community, which will impact housing and office space sales. Hence, both end-users and investors are expected to increase their investments in the sector and contribute to its growth."
Apart from this, the sector is expecting the new government to take up issues regarding the sector, which includes a fast-track approval process, a policy for affordable housing, giving infrastructure status to real estate and setting up of a sector regulator.
Over a couple of years, the sector has been battling declining sales and high inventory, along with cash crunch and piled-up debt. Both buyers and investors have been waiting for a positive outcome from the Lok Sabha election.
Experts believe with a stable government, things will start improving but the impact might be visible only after six to 12 months.
"Positive sentiments will bring back demand in the sector," an expert said.
Anshul Jain, chief executive officer, DTZ India, expects a demand of 10 million sq ft in office space by the end of 2015.
"The demand is expected to pick up in the latter half of this year. The next five-six quarters will be game-changers. Availability of funds will ease and interest rates are expected to come down as inflation cools. This will have a direct impact on the supply side of real estate."
With demand improving, the current stock of office space might not be sufficient to cater to the demand and hence, rentals could be under upward pressure, he said.
REALTY BITES
Modi magic: Realtors expect revival in property market
'Realty sector unlikely to revive soon after polls'
Developers hail RBI policy; demand easing of interest rate
Buying a home? Beware of builder's pre-launch offers
India can't put preconditions for talks: Pakistan