India’s residential sales decline 81 per cent in the second quarter

V Nagarajan

Amidst the global pandemic, India’s top seven cities saw only 1,390 units launched in Q2 2020, against nearly 69,000 units in Q2, 2019, a decline of 98 per cent.

On a quarterly basis, new launches fell by nearly 97 per cent. An estimated 41,220 units were launched in Q1, 2020, according to a recent survey by Anarock Property consultants.

Residential sales in Q2 plummeted by 81 per cent on yearly basis in seven cities - from 68,600 units in Q2 2019 to just 12,720 units in Q2 2020. Interestingly, limited new launches helped unsold inventory in the top six cities to shrink by 5 per cent on a y-o-y basis - from more than 6.34 lakh units in Q2 2019 to just over 6 lakh units in Q2 2020.

“A massive drop in both new launches and housing sales were expected on the back of a complete lockdown for most of this quarter. Interestingly, Mumbai witnessed maximum housing sales of nearly 3,620 units among all cities, followed by Bengaluru with approx. 2,990 units. Technology adoption has played a big role in housing sales of late, with many developers now strengthening their digital sales capabilities,” said Anuj Puri, Chairman — Anarock Property Consultants.

Amidst the global pandemic, the top seven cities saw only 1,390 units launched in Q2 2020, against nearly 69,000 units in the corresponding period of 2019, a decline of 98 per cent. On a quarterly basis, new launches fell by nearly 97 per cent. Nearly 41,220 units were launched in Q1 2020.

 In Q2 2020, only four projects were launched — two in Bengaluru and one each in Pune and Kolkata.

On the sales front, approx. 12,740 units were sold in Q2 2020 as against 68,600 units in Q2 2019, a decline of 81 per cent. In Q1 2020, housing sales stood at 45,200 units, a dip by 72 per cent q-o-q. NCR, MMR, Bengaluru, and Pune together accounted for 85 per cent of total sales in Q2 2020.

Negligible new supply in Q2 2020 in the top six cities led to a reasonable decline of nearly 5 per cent in the unsold stock on a yearly basis. The unsold stock in Q2 2019 was more than 6.34 lakh units, which has now reduced to approx. 6 lakh units as on Q2 2020.

In a related development, almost 75 NRI deals were closed during this Covid-19 scenario valued at over Rs 30 crore in the Gulf. Overall, Anarock has sold 900 units worth Rs 670 crore in this Covid-19 crisis, according to Shajai Jacob, Shajai Jacob, CEO - GCC (Middle East), Anarock Property Consultants.

“Almost 35 per cent of all enquiries received came from NRIs. GCC based NRIs have lapped up the opportunities available in the current scenario. Commercial properties have always seen interest from NRIs. The need for a second income has increased post Covid-19 pandemic. Over 40 per cent of sales have been in the commercial segment since January 2020,” said Jacob.

I have inherited family property and would like to gift to my two daughters living in India. My wife passed away a year ago. What is the ideal way of transferring the asset? Please clarify. Prakash Chella, Sharjah.

The succession of the property is governed by the Hindu Succession Act, 1956. It will go in equal shares to class 1 legal heirs. Such shares can be gifted or given through a Will. The relinquishment deed or gift deed should be stamped and registered with the concerned sub-registrar of properties.

There is another option. You can also execute a Will through which you can declare the ownership of the property in favour your two daughters. The Will should be signed and attested by two witnesses. Although it is not mandatory to register, it is better to register in order to minimise future disputes.

I am getting a new flat in a redevelopment agreement entered with the developer as part of an overall plan in our apartment complex in Mumbai. Will capital gain tax be applicable in this case? Joshino, Dubai.

Assuming the old building is more than three years old, you can claim exemption under section 54 of the Income-tax Act. Since one flat is exchanged with another, no capital gains tax will be applicable in your case. Indexation benefit is available and the indexed cost of the old flat will be reduced from the estimated fair market value of the new flat to arrive at the capital gains.