V Nagarajan

The Indian real estate sector has been experiencing continuous transformation since the turn of the century. This transition has been for the better and the accomplishments so far have been remarkable. The results are quite visible today as the housing sector has become better organised, compliant, accountable and transparent compared to what it was during the last decade of the 20th century.

A study by FICCI and ANAROCK on ‘Indian Housing Sector: Disrupted, Transformed & Recovering’ has covered various facets of the Indian housing sector and addressed the need to restore the faith and confidence of the buyers as the future of real estate looks bright as demand rises.

Considering that India has a large population base of over 1.37 billion residents, is rapidly urbanising, and has an inherent housing shortage, the requirement for homes will continue to exist for many more years to come. India’s urbanisation rate has increased from 30% to 35% over the past decade and is likely to reach 40% by 2036.

The residential sector will emerge stronger because: (a) real estate business is better structured and organised today due to a series of structural reforms and policy changes (b) housing prices have been range-bound for the past 7-8 years (c) home loan interest rates are at their decadal lows of 6.85% (d) affordability is all- time best (e) branded and corporate developers dominate and (f) the government has come up with a slew of measures to support the real estate sector, the report says.

A slew of systematic structural reforms and policy changes led to the elimination of weaker players, large-scale consolidation, and entry of large corporate houses into the Indian real estate sector.

Between 2008 and 2015, while the sector continued to remain unregulated and the business was fragmented, several corporate houses made inroads into the real estate sector but the inherent inefficiencies were quite visible. The entry of large players led to an expansion of the overall market and imparted pressure on the government to intervene and change the face of the sector that was growing in an unstructured manner. The value of real estate under construction increased from $ 94 billion in 2009 to $243 billion as of H1 2020, a  2.6%  increase. During  the same period, the share of housing (residential) grew from 49% to 88% indicating large-scale expansion witnessed in this  segment.

While the sector remained unregulated for long, 2016 onwards it witnessed the introduction of several reforms such as demonetisation, RERA, GST, and Insolvency and Bankruptcy Code (IBC). These reforms were much needed to restore the faith and confidence of the buyers and weed out inefficiencies in the system.  However, the liquidity crisis since mid-2018 impacted the growth path of the sector significantly and by the second half of 2019 sales and launches were slowing down. Finally, it came to a standstill in March 2020 when the nationwide lockdown was announced to combat the rising contagion of coronavirus.

The Indian residential sector has undergone a series of transformations amidst the structural changes, policy reforms, liquidity crisis, and the latest COVID-19 pandemic The sector has been resilient and has emerged stronger.  With a host of factors such as excellent affordability, low home loan rates, controlled launches, organised players doing well, and the government’s incessant support, the future of Indian residential sector looks bright, the report concludes.

My wife passed away recently inheriting a house from her parents. There is no family settlement deed or will. I have two children and want the property to one of them. Do I have the right to execute the deed? Please advise. Harshit, Sharjah.

The Hindu Succession Act applies in your case. As per the Act, the properties of the deceased will go in equal shares to Class 1 legal heirs. In your wife’s case, the shares of the property will go to two children and you.

As your status is a class I legal heir, you have an equal right to the inherited property along with your siblings.

You can transfer your share or gift or give it through a Will to your child. The other child also can do in a similar way. The release deed or gift deed should be adequately stamped and registered with the concerned sub-registrar of properties in your area.    

I have been receiving rental income from investment in commercial and residential property in Ahmedabad.  Does it require any declaration to be submitted while leasing or selling the unit for repatriation purposes? Prakash Jain, Dubai.

You can rent out the property without the approval of Reserve Bank of India.  Rent received can be credited to NRO/NRE account or remitted abroad.  

Powers have been delegated to the authorised dealers to allow repatriation of current income like rent, dividend, pension, interest, etc.

You may have to produce a certificate by a chartered accountant certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for.