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Affordable housing to attract more buyers now!

Monday, November 20, 2017
By Dominic Rebello

Who does not dream of owning a house, a place he can call his own. Everyone aspires to own a piece of land which he can call his home. The Centre, which aims to provide houses to all the urban poor by 2022, under the Pradhan Mantri Awas Yojana- Urban (PMAY-U), faces a shortage of over 10 million houses in the urban areas.
Skyrocketing property prices, land saturation and other factors have led buyers and investors to explore more cost-effective houses.

Under the MIG-I category, the carpet area of the houses has been enhanced from 90 sq.mtr to 120 sq.mtr, while under the MIG-II segment, it has been increased to 150 sq.mtr from the current 110 sq.mtr, making it more attractive to buyers now. Earlier many people were not opting to buy houses under the scheme as the previous carpet area did not seem very attractive to them.

“The cabinet’s decision is a massive positive for the macros of housing. The home buyer now has a larger pool of prospective houses to choose from. The fence sitters specially, who were delaying their home purchase will now be given a further push. Builders, meanwhile, will not only enjoy the general uptick in the market that is ahead of us, but can also accelerate the sale of housing units which were earlier missing out on a sizeable portion of the Middle Income Group audience,” said Gagan Banga, VC & MD, Indiabulls Housing Finance Ltd.

The Government remains committed to its headline mission of ‘Housing For All by 2022’, and has yet again delivered a further impetus for home buyers, home suppliers and home financiers by easing the ecosystem, he added.

"The government’s move of increasing the carpet area will help meet the needs of the middle class society in smaller towns and cities. It will also create a demand for the affordable housing sector and help builders’ clear unsold stock thereby boosting the real estate sector in coming years," said Amit Ruparel, Manging Director, Ruparel Realty.

Speaking about affordable housing, Anuj Puri, Chairman – ANAROCK Property Consultants said, “The massive gap of affordable housing has drawn the Government of India’s focused attention and resulted in many initiatives to such housings. Cognizant of the constantly growing demand for affordable homes across the country, the market has started responding with a significant rise in new launch supply in this segment over the last one year.”

The development of physical and social infrastructures can help better in push affordable housing demand even in the larger cities. Distribution and expansion of business and employment centres such as IT- SEZs, IT parks, business parks, townships with mixed developments, and manufacturing units towards peripheral and suburban areas of the core cities will be key catalysts for renewed housing demand.

However, Dr. Samantak Das, Chief Economist & National Director – Research, Knight Frank India was of the view that since the loan threshold and interest subsidy amount remained unchanged, these relaxations will not have any significant impact from the buyers point of view. However, from the supply side many more projects will now become eligible to benefit from this scheme.

The housing and urban affairs ministry is implementing the Credit Linked Subsidy Scheme for Middle Income Group (CLSS for MIG) under the PMAY-U since January 1 this year. The scheme is currently effective till March 31, 2019.

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