Bud­get 2017 wish list: should ‘pri­or­ity’ hous­ing be re­de­fined?

Hindustan Times (Chandigarh) - Estates - - HT ESTATES - HT Es­tates Cor­re­spon­dent ht­es­tates@hin­dus­tan­times.com ■

To achieve the tar­get of two crore hous­ing for all by 2020, the gov­ern­ment must pro­vide in­fra­struc­ture sta­tus to low cost hous­ing to fa­cil­i­tate easy ac­cess to in­sti­tu­tional fi­nance and re­de­fine pri­or­ity hous­ing to include first-timers as­pir­ing to buy prop­erty in cities, say real es­tate ex­perts.

On De­cem­ber 31, 2016, Prime Min­is­ter Naren­dra Modi an­nounced an ad­di­tional sub­sidy on home loan in­ter­est rates, say­ing that the gov­ern­ment will fa­cil­i­tate 4% and 3% in­ter­est rate re­bate for hous­ing loans of up to ` 9 lakh and ` 12 lakh, re­spec­tively. The real es­tate sec­tor is hop­ing that tempo will be main­tained in the up­com­ing Bud­get and the gov­ern­ment will con­sider grant­ing in­fra­struc­ture sta­tus to low-cost hous­ing to pro­vide an im­pe­tus to a sec­tor suf­fer­ing from the im­pact of de­mon­eti­sa­tion.

A key ex­pec­ta­tion f rom Bud­get 2017 is to have recog­ni­tion for af­ford­able hous­ing as in­fra­struc­ture since that would pro­vide ac­cess to in­sti­tu­tional fi­nance, says Ge­tam­ber Anand, pres­i­dent – Credai Na­tional.

To en­sure that the sec­tor achieves the tar­get of de­liv­er­ing two crore houses by 2020, the gov­ern­ment should an­nounce mea­sures to as­sist de­vel­op­ers work to­wards that goal, says Deepak Kapoor, pres­i­dent, Credai Western UP. “As of now the af­ford­able hous­ing tar­get is far be­hind and it can only be achieved if the sec­tor gets ac­corded in­fra­struc­ture sta­tus which would pave way for cheaper fi­nan­cial op­tions for real es­tate de­vel­op­ers,” says Prashant Ti­wari, chair­man, Pra­teek Group.

The gov­ern­ment also needs to re­de­fine pri­or­ity hous­ing. While it has de­fined the sizes – 30 sq m for the metropoli­tan cities and 60 sq m for ur­ban mar­kets – th­ese units are mostly tar­geted at the lower in­come group. This needs to be ex­panded to meet the ex­pec­ta­tions of the ur­ban mid­dle class, es­pe­cially those as­pir­ing to buy for the first time homes in metro cities, say real es­tate ex­perts.

“The ticket size of homes in ur­ban cen­tres is higher and cost more than ` 20 lakh to ` 50 lakh. Given the high cost of land, labour, ma­te­rial and cost of op­er­a­tions, de­vel­op­ers can of­fer houses that are in the range of ` 80 lakh to ` 1.5 crore in th­ese cities.

“The gov­ern­ment must re­de­fine pri­or­ity hous­ing to include houses that cost up to ` 1.5 crore and ex­tend the ben­e­fits to first home buy­ers for homes of up to the afore­men­tioned costs. De­vel­op­ers of such projects should also ben­e­fit from the gov­ern­ment fi­nanc­ing and other tax ini­tia­tives that are ex­tended for hous­ing de­vel­op­ment,” says An­shul Jain, man­ag­ing di­rec­tor, In­dia, Cush­man & Wake­field.

Ex­perts ar­gue that since banks are flush with funds after the note ban, in­ter­est rate ben­e­fits should be passed on to con­sumers.


Re­alty stake­hold­ers hope that the gov­ern­ment will pro­vide high tax in­cen­tives on home loans to boost de­mand for hous­ing.

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