Indian realty sector poised to reach $1 trillion by 2030

V Nagarajan, Correspondent

India’s realty sector will reach $1 trillion by 2030 from $120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. Moreover, the housing sector’s contribution to the GDP is expected to almost double to more than 11 per cent by 2020, according to CREDAI & IBEF report. Hence, the real estate industry could be different and may bring new reforms within the next few decades.

As per a recent industry research report, there has been an NRI investment of approx. Rs 46,000 crores in the last three months. The growth outlook across both residential and commercial real estate is turning positive now.

Affordable housing will be a sector that will continue to be a key driver for real estate market and provide a big opportunity for both developers as well as investors in the next few years. There is a possibility of collaboration of the developers and the top Government organisations. This would ensure the minimization of the risks that arise due to schemes, according to G. Madhusudhan, Chairman and MD, Sumadhura Group.

According to Anarock survey, of the estimated 2.3 lakh new unit launches in 2019 in the top seven cities, nearly 40 per cent or approx. 92,000 units were in the affordable segment, followed by mid-segment with a 33 per cent share. The luxury and ultra-luxury segments accounted for the least share with 10 per cent (approx. 23,000 new units). Housing sales in 2019 saw a modest 4-5 per cent annual growth with over 2.58 lakh homes sold during the year. (Over 2.48 lakh housing units were sold in 2018.) New housing launches in 2019 saw 18-20 per cent annual growth with new launches in the region of over 2.3 lakh units. (1.95 lakh units were launched in 2018.)

Office supply in 2019 will have risen by 13 per cent against 2018, touching 43.3 million sq. ft. as against 38.2 million sq. ft. in 2018. Absorption will have seen a 11 per cent yearly growth in 2019, to touch approx. 37 million sq. ft. and thereby reaching 2015 levels. Commercial spaces continued to attract maximum PE investments, totalling close to $3 billion funds in the first three quarters of 2019. In the corresponding period of 2018, total inflows within this segment equalled nearly $2.1 billion, thus rising by 43 per cent in a year.

 On the flip side, overall retail leasing activity reduced drastically by as much as 35 per cent in the top seven cities alone. As per Anarock research, the top eight cities — Bangalore, Chennai, NCR, MMR, Hyderabad, Pune, Ahmedabad and Kolkata — together saw new supply of nearly 28 million sq. ft. of Grade A & B logistics and warehousing space in 2019. Of this, nearly 20 million sq. ft. have already been leased by various players.

As the New Year begins, realty sector’s expectations will initially overtake on-ground improvement. The current trends indicate that H1 2020 will not see much growth over the patterns of 2019. However, the H2 does hold promise as the positive impacts of various government measures kick in, said the survey.

I have let out my apartment in Pune and wish to repatriate the rental income every year? Is there any approval required from any authorities before repatriation? Please clarify. Kashyap, Sharjah.

You can rent out the property without the approval of the RBI under the general permission given to NRIs/PIOs. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to authorised dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIOs who do not maintain an NRO account in India based on an appropriate certification 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.

My family members in India are forming a partnership firm to build commercial property in India. As an NRI, are there restrictions to invest in such firms? Please clarify. Sharat, Dubai.

No. You can invest as ‘real estate’ business shall not include development of township, construction of residential/commercial premises, roads or bridges.

I have let out my small house to a vendor for over 20 years and he is now refusing to vacate. He is citing the long stay as the reason and wants a place in the new building. I am planning to demolish the old building for redevelopment. What is the legal remedy available to me? Adnan, Dubai

The tenant cannot seek any special protection just because he has stayed over 20 years in your house. You could invoke any one of the available ground under the Rent Control Act to evict the tenant. Reconstruction is a valid ground to proceed against the tenant and it is not necessary that you should offer him a place in the reconstructed area.