V Nagarajan

The pandemic dealt a major shock to the Indian housing market. Sales of residential units plummeted in Q2 2020, with prospective buyers postponing their purchase decisions. However, the situation has improved since May.

While there is still a long way to go, the worst seems to be over for the residential segment. A combination of favourable factors such as low mortgage rates, stable prices and flexible payment plans of developers make this an appropriate time for fence sitters to enter the market and strike a lucrative deal, according to a survey by JLL India. The government and the central bank have also played their roles. Central bank’s move to allow one-time restructuring of personal loans (including home loans) was a long awaited one and aided in improving consumer sentiment. Additionally, the Maharashtra government reduced stamp duty rates from 5 per cent to 2-3 per cent, effective Sept.1.

If other state government’s follow suit, this can go a long way in speeding up the revival of residential real estate in India.

Some initial signs of revival were witnessed in the market with sales increasing by 34 per cent in Q3, 2020 when compared to Q2, 2020. Sales of residential units in Q3, 2020 improved in all the residential markets, except for Bengaluru and Kolkata.  As sales outpaced new launches, unsold inventory at various stages of construction across the seven markets under consideration decreased marginally from 459,378 units to 457,427 units.

An assessment of years to sell reveals that the expected time to liquidate this stock has increased from 3.6 years in Q2 2020 to 4 years in Q3 2020 because of a slowdown in average sales velocity.

Residential sales in Chennai witnessed the highest growth in Q3.  New launches in Chennai also witnessed an eightfold increase from 182 units in Q2 to 1,487 units in Q3.  While Delhi-NCR witnessed 38 per cent growth and Mumbai reported 17 per cent, Bengaluru recorded a 12 per cent drop in sales.  

According to Anarock survey, between January to September 2020, as many as 87,460 units were sold across the top seven cities as against approximately 2.02 lakh units sold a year ago. However, the quarterly numbers indicate that the worst is over for the residential sector. Third quarter of 2020 saw home sales values increase by more than 2.3 times to approx. INR 29,731 crore - up from INR 12,694 crore in the preceding quarter. Q1 2020 saw home sales worth approximately INR 46,306 crore. The upcoming festive quarter (October-December) will very probably see home sales values go up on the back of increased demand fed by financial schemes and offers.

My brother has not left any Will after his demiseand he borrowed home loan to invest in the apartment in Delhi.  What will be the legal position of the borrower in this regard?   Please advise. Navaneetha Krishnan, Sharjah.

When a home loan borrower dies the bank or the lender initially approaches the guarantor.  If there is no guarantor, the legal heir will be approached, and the loan/mortgage will be transferred in his name.  

The legal heir will be responsible for the payment.  

To transfer the property as well as the mortgage to the legal heir, a no-objection certificate from the lender will be required.  In case your brother has opted for a loan repayment insurance, the home loan will be directly paid by the insurer.  

Thereafter you can collect a loan clearance certificate from the concerned lender as well as the original property documents.    

I am employed in the Gulf and intend taking home loan from here.  My wife is in India and employed with a private firm.  Is joint home loan advisable or she can just contribute from her savings? Rajendra Jyoti, Dubai.

Yes.   A joint home loan can save taxes.  Both of you can claim deduction on the principal repayment and interest paid, separately, from both your incomes to the extent of your respective share in the loan.  At the same time, remember that being a co-borrower would not be enough to claim tax breaks.  There should be a clear mention of the ratio of the residential property in the sale deed.  Again it is better to pay respective portions from separate bank accounts.