BIGGER HOUSES ELIGIBLE FOR LOAN SUBSIDY IN MIG CATEGORY
NEWDELHI: In some good news for builders and middleclass homebuyers, the Union cabinet increased the carpet area of houses under the government’s affordable housing scheme on Thursday.
The decision could help homebuyers access bigger, ready-tomove-in house sat lower costs, while developers with large inventories could look forward to renewed demand, triggering a virtuous cycle of employment generation and economic growth.
The tweaks to the NDA government’ s flagship housing programme–Pradhan Mantri A was Yojana (PMAY)– follow requests from the industry which was saddled with thousands of flats that had marginally bigger carpet areas than allowed in the scheme.
In the first middle income category (₹6-12 lakh/annum), t he carpet area was raised from 90 to 120 square met re (968 sq ft -1,184 sq ft ). In the income category of ₹12-18 lakh/annum, the carpet area was increased from 110 sq mt to 150 sq mt (1,291 sq ft -1,614 sq ft ). Eligibility criteria and interest subsidies on loans remain unchanged.
“The increase in carpet area will enable individuals under the MIG category to have a wider choice in developers’ projects. It will give a boost to the sale of ready built flat sin the affordable housing segment,” Union housing and urban affairs minister Hardeep Puri told journalists.
The mushrooming of private developers from 2007 to 2013 saw land owners turn real estate companies. The obvious fall out was incomplete projects, and a breakdown of consumer and investor confidence. But realty majors said that R ERA has added a positive dimension to the sector.
The affordable housing sector was given as hot in the arm by the government in its budget this year, as it gave it the status of infrastructure. This allowed tax holidays and easier access to credit for developers in this segment.
“Consumer sentiment for affordable homes has been on a rise from thepast three quarters with the benefits of the changes in the real estate sector bearing fruit ,” said Bro tin B an erjee, CEO and MD, Tata Housing.
With the changes, the cost of a house will go up but Sr ira mK al yanaraman, managing director and CEO of National Housing Bank(NHB), told HT that it would still be affordable for the MI G category.
“In a city like Aurangabad, a person with a salary of Rs 12 lakh can easily get a loan of Rs 40 lakh. With that he can easily afford to buy a house of 1184 sq. ft,” said K al ya nara man who heads NH B, the regulator for all housing finance companies.
P MAY was initially targeted to benefit those with incomes up to Rs6 lakh a year. Last December, Prime Minister Narendra Modi announced expanded its am bit to include the middleclasses till December 2017. But in September, the government extended the scheme for the category to March 2019.
The Union finance ministry had allocated ₹1,000 crore under the programme. The ministry intends to target 50,000 people under the scheme in 2017-18.
“Now we will be able comfortably provide a two-bedroom house intheMIG category, thebenefits under the infrastructure category that developers get will be passed on to the homebuyers,” saidPradeepJain, founderchairman, Parsvnath Group.