In­ter­est waivers

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com

Two ad­di­tional cat­e­gories were in­tro­duced un­der the Prad­han Mantri Awaas Yo­jana (PMAYUr­ban) for in­ter­est sub­ven­tion.

Un­der this, home loans up to lakh taken in 2017 will re­ceive in­ter­est sub­ven­tion of 4%, while those up to lakh will get in­ter­est sub­ven­tion of 3%. This will be over and above the 6.5% in­ter­est sub­ven­tion on home loans up to lakh al­ready avail­able in PMAY.

The an­nounce­ments are ex­pected to give a boost to the con­struc­tion and hous­ing sec­tors.

“It will help tap the po­ten­tial hous­ing de­mand. It will also help gen­er­ate em­ploy­ment in the sec­tor, which will ul­ti­mately lead to fur­ther de­mand growth in the bud­get and af­ford­able hous­ing seg­ments. But as the fo­cus is only on bud­get hous­ing, these steps wouldn’t help ab­sorbency of the cur­rent large un­sold hous­ing in­ven­tory with the builders. Most of the sup­ply, at present, is in high-end realty prod­ucts,” says RP Mal­ho­tra, a Panchkula-based builder.

The miss­ing el­e­ment

For long, pri­vate sec­tor devel­op­ers have ig­nored hous­ing sup­ply ex­pan­sion in the bud­get and af­ford­able se gments. Most hous­ing sup­ply is con­cen­trated in the mid-price seg­ments, and a size­able por­tion caters to lux­ury seg­ments. Devel­op­ers blame govern­ment reg­u­la­tions re­gard­ing FAR (floor area ra­tio), den­sity and cov­er­age area; and lack of in­cen­tives for the pri­vate sec­tor to in­crease sup­ply for the bud­get and af­ford­able seg­ments.

Wel­com­ing the an­nounce­ments, Parveen Jain, the pres­i­dent of NAREDCO (Na­tional Real Es­tate De­vel­op­ment Coun­cil), said, “Ru­ral hous­ing con­struc­tion un­der PMAY has got mo­men­tum but ur­ban hous­ing is still strug­gling be­cause of com­plex­i­ties of land ac­qui­si­tion, lack of in­fra­struc­ture and non­avail­abil­ity and af­ford­abil­ity of hous­ing fi­nance from a recog­nised bank­ing chan­nel. Govern­ment an­nounce­ment of in­ter­est sub­ven­tion on home loans up to R12 lakh will be a relief to lower in­come group (LIG) and the neo-mid­dle class.”

But, he added that devel­op­ers should also be given in­cen­tives for en­cour­ag­ing af­ford­able hous­ing in the ur­ban cen­tres. “Pri­vate sec­tor devel­op­ers, with some flex­i­bil­ity in plan­ning, ex­e­cu­tion and mar­ket­ing along with in­cen­tives in tax­a­tion will be of great help in meet­ing the hous­ing short­age in the ur­ban ar­eas,” he said.

Realty ex­perts also felt that the PM’s an­nounce­ment re­gard­ing the in­ter­est waivers have left sev­eral ques­tions unan­swered. “The Bud­get should give more clar­ity on the ac­tual def­i­ni­tion of ben­e­fi­cia­ries who can avail of these ben­e­fits. For ex­am­ple, would young ur­ban pro­fes­sion­als hop­ing to buy their own apart­ments but not be­long­ing to ei­ther the EWS or the LIG seg­ments be al­lowed sim­i­lar sub­ven­tions? Also, af ford­able hous­ing is largely avail­able in the fringe ar­eas of met­ros and tier-II, III cities. Will cer­tain re­de­vel­op­ment projects within met­ros meet­ing the af­ford­able hous­ing def­i­ni­tion be granted sim­i­lar ben­e­fits?” says Anuj Puri, chair­man and coun­try head, JLL In­dia.

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