A vehicle drives past residential buildings in Mumbai. File/Reuters

V Nagarajan

Indian real estate sector transaction volumes in Q2 2022 reflect a resilient response to global changes, registering a marginal uptick of 2% in the immediate quarter.

Investments in Q2 2022 were 27% lower on an annual basis as the visible impacts of global financial uncertainty became more pronounced during the quarter. This resulted in lower transaction volumes compared to Q2 2021 investments. Q2 2022 maintains investment momentum at $966 million, JLL said in its capital market update for Q2 2022. trimester.

Despite the difficult environment, the real estate sector continued to grow with gross office rental volume in Class A offices up 36% quarter-on-quarter to 14.3 million square feet in Q2 2022. The residential market recorded sales of over 53,000 units in Q2 2022, which is a 171% year-over-year increase from Q2 2021 in the top 7 cities. Retail and hospitality also showed robust momentum as businesses returned to pre-pandemic levels. Data centers continued to attract investors aggressively seeking strategic/financial partnerships.

The rebound in the office sector with a return to the office and renewal of leases led to improved investment sentiments, as evidenced by capital inflows of $652 million during the second quarter of 2022. There was a preference for core office assets, indicating a preference for assets generating operating rents.

Institutional investment in Indian real estate reached $1,909 million in the first half of 2022, up 73% from the same period last year. Expected investment growth in 2022 has been impacted due to global headwinds caused by the geopolitical situation. The year 2021 was marked by a recovery in investments, which led to the first half of 2021 recording investments of $2,630 million. However, the ebb of the pandemic coincided with the onset of the geopolitical crisis in 2022 and impacted stability and growth globally. Indian real estate recorded a sustained recovery despite an uncertain economic environment. However, investment momentum has been slower in response to uncertainty leading to $1,909 million in the first half of 2022.

Real estate sector lending by banks in the first 5 months of 2022 is 75% of 2021 levels. increased from $4 billion in 2019 to $1.5 billion in 2020. Construction funding dried up sharply as project construction stalled due to pandemic conditions.

However, the situation reversed in 2021 with the gradual return to normal.

Banking sector credit to the real estate sector has grown 3.5 times in 2021 compared to the pandemic period due to the low interest rate regime and easing of lending standards.

Residential real estate has seen a strong recovery from the decline of the pandemic. This has improved developers’ cash positions due to strong home sales.

The office sector saw a net absorption of 26 million square feet in 2021, accelerating the growth cycle. Improved balance sheets have helped developers access credit from the banking sector at low lending rates.

This translated into a 3.5x growth in net loan disbursements. The first five months of 2022 continued the growth momentum with net credit disbursement of $4.0 billion, or 75% of total disbursements in 2021.

Global financial markets are bracing for further uncertainty created by the geopolitical situation which has led to unforeseen results. India’s economy has also been affected by global headwinds. However, the inherent strength of the economy has helped maintain the growth momentum.

My sister and I bought an apartment together and it was registered in my father’s name in 2018. With the passing of my father, we recently sold the apartment. What are the tax implications as we split the proceeds of the sale equally between us? Umesh, Sharjah
In your case, it will be considered a long-term capital gain because it was held for more than 24 months. The applicable tax rate would be 20% after indexation benefit. According to the rules, you can invest in another residential property within two years or build within three years from the date of transfer. Alternatively, you can invest the capital gains in NHAI and REC bonds within six months from the date of transfer of ownership with a maximum limit of Rs 5 million for each of you.

I inherited an ancestral property in Pune. Can I give it to my relative who is in India? Please specify. Sharan Gouda, Dubai.
If it is an ancestral property, the heirs obtain the right by birth, according to the religion to which they belong in India. Ownership can be transferred by reorganization, by family settlement or by division in the case of a HUF (Hindu Undivided Family). If you wish to donate your portion of ancestral property, you can do so without any restrictions as it is like your self-managed property.