HOUSING FOR ALL - Affordable housing, the new big thing
Affordable housing will reap the maximum benefit as a result of the extra cushion provided by the central government's recent decision to give interest rate rebate on home loans for buyers in this segment.
Also, it is a great time ahead for the sector with most banks reducing home loan rates by up to 90 basis points ahead of the Union Budget on February 1. Most homebuyers begin to plan property purchase around this time, as they have more clarity about their finances in the new fiscal year that begins on April 1.
Presently, there is a buzz around the affordable housing segment after the Prime Minister announced a slew of rebates on home loans under the Pradhan Mantri Awas Yojana (PMAY), on December 31.
Under this, the central government would give a 4% subsidy on the interest rate for home loans of up to Rs 9 lakh, and a 3% subsidy on home loans of up to Rs 12 lakh. Taking the cue from the PM's Address to the Nation, several leading banks have also cut their lending rates. The State Bank of India (SBI) reduced its marginal cost of funds based lending rate (MCLR). It means that if you are planning to get a loan from SBI, the new rates will be 8.65% against the earlier 9.55% per annum.Other banks like PNB, Union Bank of India, IDBI, etc, have also reduced their MCLR for loans to customers.
With HUDA already coming up with its own Haryana Affordable Housing Policy in Gurugram and Uttar Pradesh also set to launch its own version under the Samajwadi Awaas Vikas Yojna, the demand for affordable housing projects has suddenly shot up.
Ever since the “affordable housing“ and “Housing for all“ missions were launched by the Modi government, developers across the country shifted their focus to budget homes.
One estimate says that nearly 1.5 lakh units would be ready for delivery by end 2022, in the NCR regions like Gurugram, Bhiwadi, Neemrana, Ghaziabad, and the twin cities of Noida-Greater Noida. This figure would only multiply once the Budget gives more clarity about the policies and concessions to this segment.
The Delhi NCR has the highest demand for this category of property but, with most projects costing over Rs 50 lakh, customers ended up renting a flat for a lifetime. But, things are now changing with developers like Raheja Develop ers, Supertech, Signature Global, Eros Group, Nirala World, Gaursons, Land Crafts, Antriksh India, Mahagun Group, Aditya Builders, SARE Homes, Ashiana Housing, Krish Developers, and Falcon Realty offering the mid-segment homebuyers quality housing projects at much more competitive prices.
These developers say that they would help the Modi government achieve its stated objective of providing “Housing for all“, nearly six crore houses, by 2022. Some of these projects are already nearing completion, while new ones are also being launched.
Gurugram-based Signa ture Global has recently launched affordable housing projects like “The Roselia“ in Sector 95A and “The Serenas“ in Sector 36, South of Gurugram.Pradeep Aggarwal, chairman of Signature Global, said: “Affordable housing has always been in huge demand but there has always been a large vacuum in supply. We have launched several affordable housing projects in the last two years and have just launched two more affordable projects on a cumulative investment of over Rs 500 crore.“
R K Arora, CMD of Supertech, says: “We, have launched `Basera', a residential project in Sector 79, Gurugram, at a very competitive price. The project offers 1and 2BHK apartments, starting from Rs 12.87 lakh, and the units have been planned with well-designed layouts and optimally-sized living spaces.With the launch of this project, we are redefining affordable living in the Millennium City of Gurugram.“
Avneesh Sood, director of Eros Group, said: “With the recent rate cuts and policy makeover, demand for affordable housing or, rather, the demand in end user market, has increased. In recent times, Greater Noida West has emerged as a much sought-after investment destination where the prices are much more affordable compared to Noida or Delhi. We are already offering Phase 1 of Eros Sampoornam in Greater Noida West for possession; as the project is in the affordable category, response from customers is very encouraging.“
Rakesh Yadav, chairman of Antriksh India, said: “We are inching closer towards fulfilling the Prime Minister's dream of building six crore affordable housing units for the urban poor by 2022. The reduced lending rate on home loans will create fresh demand and developers across the country would focus on affordable housing projects for some time to come.“
Dhiraj Jain, director of Mahagun Group, says: “The rebate on lending rates on af fordable housing is big news. The lowest rate in the market is 8.60% at present; thus, prospective buyers will basically be borrowing at 4.60% for loans up to Rs 9 lakh and at an effective rate of 5.60% for a home loan of up to Rs 12 lakh. The EMIs for this category have fallen by nearly 40%, which will en hance the demand for housing amongst the buyers of this segment.“
Raheja Developers is developing Kr ishna Housing Scheme, an affordable housing project in the price range of Rs 12 lakh, over 10 acres in Sector 14, South of Gurugram, abutting the Aravali hills and within walking distance of the Mod el Industrial Township of HSIIDC. The group also has plans for a new afford able, plotted project under the Deen Dayal Jan Awas Yojna, an affordable housing project of the Haryana govern ment.
Navin Raheja, CMD of Raheja Group, says: “Affordable housing is the next big thing. The recent announcement by the central government to encourage hous ing for lower-income groups through af fordable housing programmes will rein vigorate the sector. Low-cost housing, which is generally robust, has shown an uptick in the last two years.“
Ashish Agarwal, director of Aditya Builders, said: “Private sector develop ers, with some flexibility in planning, ex ecution and marketing, along with some incentives in taxation, would be of great help in meeting the housing shortage in urban areas. The new scheme for the new middle class in rural areas, which gives an interest subsidy of 3% on loans up to Rs 2 lakh, taken in 2017, for con struction of new houses or extension of old ones is very positive.“