Indian realty sector is gearing up for better days
Labourers work at a construction site on the outskirts of Kolkata. File/ Reuters
India’ half yearly realty report findings establish that office space market experienced decadal high (half yearly) volume in supply and transactions in H1, 2019. Office supply increased by 31 per cent year-on-year (YoY) to 2.2 million sq m (23.9 million sq ft), the highest level achieved in this decade. While transactions were recorded at 2.6 million sqm (27.4 million sq ft) higher by 26 per cent YoY in H1 2019.
Co-working space providers have taken up approximately 0.37 million sq m (4.0 million sq ft) of office space during H1 2019, a 42 per cent growth over H1, 2018, according to Knight Frank India survey.
Residential unit launches in H1 2019 increased by 21 per cent year-on-year (YoY) to 0.11 million units while sales grew by a steady 4 per cent YoY to 0.13 million units.
The residential market witnessed growth in supply as well as sales for the third consecutive half year period, both hitting their highest level since demonetisation during H2 2016.
Regulatory environment boosts market volumes; H1, 2019 saw launch of new units rise by 21 per cent YoY to 107,143 units while sales grew by a steady 4 per cent YoY to 133,317 units.
51 per cent of launches during H1 2019 have occurred in the ticket sizes under INR 5 million and 78 per cent under INR 10 million as developers’ keenly focus on affordable housing and lower ticket sizes to be demand appropriate.
The all India sales improved by 4 per cent in H1, 2019 making this the third consecutive quarter to record sales improvements.
The trends conclusively show a general arrest of a declining trend that can well be the infliction point leading to growth of sales in the market.
During the last four years, the growth in residential prices in most of the top eight cities of India has been below retail inflation growth and the gap has progressively increased since H1 2016.
This has helped keep the end-user interested and arrested the downward sales momentum as compared to launches.
Hyderabad has been the only market to buck the trend and recorded residential price growth over the retail inflation level.
Unsold inventory across top eight markets recorded a decline of 9 per cent YoY in H1, 2019.
While Hyderabad saw a decline of 67 per cent in unsold inventory, Mumbai was the only market to record an increase with inventory overhang increasing by 14 per cent.
Q: I am inheriting immovable property from my family. Can I sell the property and repatriate the sale proceeds to Gulf. What are the documents required to get the clearance? Santosh Rane, Sharjah.
Yes. You are allowed to repatriate the sale proceeds of immovable property inherited from your relative in India. The documents required include documentary evidence in support of your inheritance and necessary tax clearance certificates from the Income-Tax authority. The amount should not exceed USD 1 million per financial year.
Q: My friends in India are forming a partnership firm to build farm houses in India. As an NRI, are there restrictions to invest in such firms? Please clarify. Santhosh Nair, Dubai
Yes There are restrictions for NRIs to invest in such firms as certain categories of properties are prohibited for investment. NRIs or Persons of Indian Origin (PIOs) are not allowed to make investment in ‘real estate’ business or construction of farm houses. However, you should note that ‘real estate’ business shall not include development of township, construction of residential/commercial premises, roads or bridges.
Q: I have been working in the Gulf region for the past six years and recently received an immovable property by way of gift from my relative in India. I have no immediate plans to return to India. Can I dispose of the gifted property and repatriate sale proceeds to my foreign account? Mohit Gupta, Dubai.
You can repatriate the immovable property received by way of gift from your relative in India. The sale proceeds of the immovable property should be credited to NRO account only.
From the balance held in the NRO account, you may remit upto US$1 million, per financial year, subject to the satisfaction of the authorised dealer and payment of applicable taxes. You may be required to file tax return for property sale income and taxes paid on it.
