RAISING SENTIMENT - 7th CPC boosts sector
The implementation of 7th Central Pay Com mission (CPC) recommendations is an important milestone in the real-estate cycle, as increase in the salaries of government employees is likely to boost demand for home purchases.
The Union Cabinet decided that the arrears of pay and pensionary benefits will be paid during the current financial year--2016-17--itself. Nearly 1 crore employees, including 47 lakh central government employees and 53 lakh pensioners, of whom 14 lakh employees and 18 lakh pensioners are from the defence forces, will benefit from this.
Experts say that the recommendations are expected to raise the incomes of nearly 3.4 crore employees and pensioners in all, once the state governments, too, implement their new pay scales.
Needless to say, the housing sector is expected to be the biggest beneficiaries of the rise in income and spending capacity of government employees.
The CPC recommended 16% raise in basic salary and 138.7% increase in house rent allowance (HRA), which will spur the demand for housing.The Union Cabinet also approved CPC's recommendation for substantially enhancing the ceiling of House Building Advance from Rs 7.5 lakh to Rs 25 lakh, while the period of continuous service to avail of it has also been reduced.
Experts say that this collective population of central and state government employees, who will see an increase in monthly salary from this month on, are likely to play a key role in pushing demand in the housing sector, as there is a direct relation between housing de mand and one's purchasing power.
Several banks including SBI, and developers like Amrapali, Supertech, Antriksh India, Gaursons India, Migsun, Saya, Mahagun, etc, are gearing up to cater to this segment with attractive schemes and payment plans.
The country's the largest lender, State Bank of India (SBI), has timed the launch of its two new loan schemes `SBI Privilege Home Loan'-for government employees-and `SBI Shaurya Home Loan'--for Defence Personnel--with the notification of the 7th CPC recommendations by the central government. The scheme has been prepared to prompt government employees to buy a home to utilize the surplus income that they will get through the implementation of the 7th CPC.
Under these two schemes, employees of central and state governments, defence forces, PSBs, PSUs of the central government, and other people with pensionable service are being offered schemes tailored to their specific needs, which will help them purchase a spacious--or luxurious--home, without stretch ing their post-retirement finances.
BI has increased the repayment period for this--by 5 S years--up to the age of 75 years, up from 70 years so far, so that the EMI is reduced. The bank has done this as the pension amount after the retirement has increased substantially after the notification of the 7th CPC.
Apart from this, the interest on home loan for government employees has been cut by 5 basis points (100 basis points is equivalent to one percentage point).
Among the developers, Migsun Group has a special scheme for government employees. Under this, homebuyers have to pay Rs 19,000 per month, or 1%, and don't have to pay interest amount, just the principal amount. Homebuyers can book by paying Rs 71,000 and the rest of the amount can paid when the 7th CPC arrears are received.
Gaursons India Ltd has launched a special scheme--21 plan--for their integrated township, Gaur Yamuna City, along Yamuna Expressway. Under this, one needs to pay no EMIs till possession; the buyer has to payout the booking amount of Rs 21,000 per month for the first 10 months and then start paying only once he has been offered possession.
Manoj Gaur, MD of Gaursons India Ltd and president of Credai-NCR, said: “We are offering apartments starting from Rs 21.80 lakh. The payment plan is very simple and we are not asking for any money before possession, except for the booking amount.'' Antriksh India has a similar plan, 10:80:10 payment scheme, for their project Antriksh Grand View in Sector 150 on Noida Expressway. Rakesh Yadav, chairman of Antriksh India Group, said: “If you take a close look, all the plans will end up giving you similar benefits--but you should not just fall for these. The track record of a developer and his capability in delivering a project matters the most because, in the end, the main sticking point is one of possession.“
Vikas Bhasin, MD of Saya Group, said: “We will be offering an exclusive flat rate for a specified number of units in our project, Saya Gold Avenue, in Indirapuram. This rate would be more than competitive than what exists in the actual market.Also, we have a “10:80:10 payment plan“ already running for our project, Saya Zion, in Greater Noida West.“
Amrapali Group claims to have sold 3,000 housing units to government employees, in past several weeks, under the Adarsh Awas Yojna in Greater Noida West.
Anil Sharma, chairman of Amrapali Group, said: “Under our Adarsh Awas Yojna, we were planning to construct around 5,000 flats; but, owing to huge demand in affordable housing, we have decided to increase the number to 10,000, of 9751,300 sq ft, with prices starting from Rs 22 lakh onwards. The scheme covers all the safety and regulatory norms along with many attractive features.“
Supertech is also has a special housing scheme for serving and retired government employees in Sector 2, South of Gurgaon (Sohna).