Indian residential property market gaining momentum gradually

V Nagarajan

After a protracted sluggishness, India’s residential market is slowly but steadily gaining momentum, if the leading developers’ version of their recent sales performance in the Covid-19 regime is any indication.

Today end users dominate the market and preference for larger homes and built units tilt the balance in favour of sales.  In a webinar jointly organised by CII and JLL, realty sector’s leading players have shared their overall perception of the residential market.  

While the speculative investors have exited, it is the end users who are dominating the residential market now, said M R Jaishankar, CMD of Brigade group.  The demand is attributed to the new social distancing norms leading to preference for large size apartments to accommodate work from home (WFH) option continuously encouraged by the corporates.  Moreover, returning NRIs constitute a major segment driving demand from the Gulf and US.  At home, those living in shared accommodations are also keen to move to ownership homes as WFH option is here to stay for a longer time. According to J C Sharma, vice-chairman and MD of Sobha Developers, there is a better awareness of owning a home today as an asset class in a gated community project.  

A substantial segment of the people are keen to buy homes as is evident from the surge in the number of enquiries received by large developers reaching pre-Covid levels.  

All time low lending rates and flexible repayment options are no doubt supplement the growing trend.  We have limited inventory and prices remain stable.  

Over 70 per cent of the sales belong to Rs1 crore plus segment and affordable housing is doing well.  Sobha has achieved a turnover of Rs 500 crore in the last quarter, he said.  

“We are cautiously optimistic for Mumbai scenario on the initial signals reviving hopes for recovery,” said Sandeep Runwal, MD of Runwal group.  

There is a consolidation of demand happening with the stronger players.  

The government has reduced stamp duty recently by 75 per cent which has given a boost to sales.  Land cost alone used to be 80 per cent of the project cost which has since come down to 50-60 per cent.  Input tax credit if extended by the government will only help in increasing revenue to the government.  

For an apartment costing Rs 1.0-1.5 crore, 33-35 per cent of the share is being taken by the government by way of taxes and important ingredients like cement are taxed at a whopping 28 per cent.  , he said.  

According to Reeza Sebastian, President, Residential, Business of Embassy group, with the millennials population touching a new high of 400 million and a combination of favourable factors like low lending and repo rates and stable prices, the timing is appropriate to enter the market.  

With the new launches decreasing and the pent up demand growing, it is only a matter of time for the developers to gear up themselves.  

There is a growing demand for well managed assets.  Moreover, IT industry body Nasscom has estimated that the share of women employees in the IT/ITES sector significantly rose to 35 per cent in FY20, improving the prospects of a further surge in homebuying, she said.  

Industry experts felt that residential demand will only grow up due to emerging concepts like co-living, co-working and student housing further boosting demand.  There may be a need for design changes in view of the pandemic thrust imposed WFH concept engulfing IT sector.  

My father passed away recently and there is no family settlement deed or will.  I am living in the Gulf with my family.  My family members are denying inheritance rights stating my marital status.  What is the legal position?  Please advise. Nirmala, Sharjah.

As your status is a class I legal heir, you have an equal right to the inherited property along with your siblings and mother.  Persons falling in the first entry are the sons, daughters and husbands of intestate.  The expression sons and daughters would include within them, husband and children of predeceased sons and daughters, if any, shall take the property simultaneously.   

I am a PIO and hold agricultural lands inherited from my parents in India.  Can I transfer the land to an NRI in the Gulf?  Drivedi, Dubai.

No. You cannot transfer the agricultural land to an NRI or PIO as the law restricts to transfer to an Indian citizen and that too a resident in India.   This is because the government feels that agricultural holdings should continue to remain in the hands of Indian citizens.  This is one reason why new investments by NRIs/PIOs are prohibited in restricted categories like agricultural lands, plantation and farmhouse properties.