14 Mar Indian real estate sector is facing the impact of Covid-19
Workers paint the exteriors of a newly constructed residential building on the outskirts of Kolkata, India. Reuters
With the global impact of Covid-19 on multiple sectors, Indian realty sector is by no means an exception. It is said that there may be fewer residential project launches in the coming months.
Though sales activity has improved over the last two quarters, the fear psychosis has already gripped the industry. There are some who feel that the sales activity might pick up due to lower home loan rates and reduction in stamp duty in some states.
“The COVID-19 situation remains fluid and uncertainty still looms on the possible economic impact of the outbreak.
Global supply chains will be disrupted in the short-term and this will undoubtedly have some impact on manufacturing in India. At this stage, the UN estimates the trade impact of the epidemic for India to be a $348 million on the external front,” Samantak Das, Executive Director and Head of Research, REIS, JLL.
“Given that the real estate sector contributes significantly to India’s economic growth, it is important to broadly analyse how the outbreak will influence this sector and it’s still premature to assess the current impact. We are already seeing a slump in the hotel and hospitality sector due to the cancellation of flights and closure of borders. The retail sector too will be challenged due to sourcing disruptions in the apparel, footwear and accessories space. Moreover, the slowdown is already being reflected in the delayed decisions by retailers to lease spaces. While the commercial sector has been on a strong foothold, investors and businesses will adopt a wait-and-see approach that we’re witnessing in other global markets.”
“Business-wise, it will have an impact on the hospitality sector, especially on luxury hotels. Luxury chains have about 60-65% foreign travellers in their total guest composition and a large chunk of their business will potentially be impacted this season. Luxury hotel rates are also likely to decline in both quarter one and two as result. A full rebound may take time but we could see some recovery signs in the third quarter depending on the wider situation. Mid-scale brands on the other hand, derive more business from local tourists but even for those chains two quarters are going to be challenging as domestic travel restrictions come into force. Occupancies will be hit for sure but given the fluidity of this global situation, assessing the impact is a challenging proposition,” according to Jaideep Dang, Managing Director- Hotels & Hospitality Group, JLL.
We have an ancestral property and found out while mortgaging the unit that one of our relatives had sold the property including the shareholding of others without the knowledge of others. What is the legal remedy to resolve this issue? Arvind Kumar, Sharjah.
As regards ancestral property, the basic requirement while investing is to get the consent of all the co-owners. One of the co-owners cannot arbitrarily take any decision unless he has been given power of attorney and authorised by all the co-owners. However, he can sell his undivided share of the property but not the entire property on his own discretion. You will have to file a suit for partition of the property in order to get your share of the ancestral property.
Can a foreign national invest in Indian property whether residential or commercial? What type of approval is required from the authorities? Please clarify. Sekar James, Dubai.
A foreign national of non-Indian origin resident outside India cannot purchase any immovable property in India but he/she may take residential accommodation on lease provided the period of lease does not exceed five years. In such cases, there is no requirement of seeking any permission of or reporting to the Reserve Bank of India.
A foreign national, who is a person resident in India, can purchase immovable property but he would have to obtain the approvals, and fulfil the requirements if any, prescribed by other authorities, such as the state government, etc. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan, would require prior approval of Reserve Bank of India. Such requests are considered by the Reserve Bank in consultation with the Government of India.
I have less taxable income in India and taxes are deducted by way of TDS. How to claim refund of this amount? Brinda, Dubai.
You can claim refund of taxes only by way of filing an income tax return to the appropriate authorities. While tax is deposited by way of TDS, the only way you can claim is by filing a tax return. The returns should be compulsorily filed online.