Periphery better option than tricity
Relatively low prices for biggersized properties in the periphery and the Pradhan Mantri Awas Yojana – Urban are the perfect match for home buyers looking for affordable housing
The affordable housing policy of the central government in the instance of the loan subsidies to the home buyers gels perfectly with the inventory available in the Chandigarh tricity periphery. While Chandigarh, Panchkula and SAS Nagar, even after six years of price corrections, remain unaffordable for most home buyers, the periphery attraction has steadily increased because of relatively cheaper prices at all the property size categories.
THE SIZE CATEGORIES UNDER CLSS
Under the ‘Housing for All by 2022’ mission, the NDA government at the centre supports affordable housing through the credit linked subsidy scheme (CLSS) as a component of the Pradhan Mantri Awas Yojana – Urban (PMAY-U). The scheme covers both the low income groups (LIG) and the middle income groups (MIG) of home buyers, and provides for 3% to 6.5% interest subsidy on home loans for different income and property size categories.
The home loan interest rates start from around 7%. For the LIG home buyers, the size category is 645 sq ft. For the MIG buyers, the government recently tweaked the size categories.
The carpet area in the MIG I category of CLSS is was increased to up to 1,292 sq ft from the existing 969 sq ft. Carpet area for MIG II category of CLSS was increased to up to 1,615 sq ft from the existing 1,184sq ft. For the MIG-I category, a 4% interest subsidy is provided to the beneficiaries with an annual income of ₹6 lakh to ₹12 lakh on a loan of up to ₹9 lakh.
Under the MIG-II category, the beneficiaries with an annual income of ₹12 lakh to ₹18 lakh get a 3% interest subsidy on a loan of up to ₹12 lakh.
For economically weaker sections (EWS) and LIG covers urban poor with income levels of ₹3 lakh and ₹6 lakh per year respectively.
Under CLSS (EWS/LIG), interest subsidy of 6.50% is being provided on a loan of up to ₹6.00 lakh. Total interest subsidy available to each beneficiary under this component is ₹2.30 lakh.
The government also reduced the tax burden on affordable housing in recent notification. A reduction of 4% in the Goods and Services Tax (GST) from 12% to 8% was made effective on January 25. The reduction is applicable for the CLSS for residential properties up to 645 sq ft. Other home buyers will continue to pay the existing 12% GST after factoring in the one-third abatement for land value.
The government had notified the GST on under-construction real estate at 18% applicable on two-thirds of the value of the property. After the adjustment to the land cost, the effective tax is 12% of the selling price of a property.
LITTLE IN CITIES, MUCH GAIN FROM PERIPHERY
In Chandigarh, Panchkula and SAS Nagar, even the smallersized properties, say less than 1,000 sq ft, are priced over ₹40 lakh.
These are either 1-BHK apartments or the 2-BHK apartments. But these are unaffordable for the buyers in the EWS and LIG categories.
Similarly, for the MIG buyers, looking for a house between 1,000 sq ft and 1,700 sq ft, the prices in these cities start from ₹60 lakh for such properties and can go up to ₹2 crore and above.
For instance, the savings in terms of interest subsidy accrued in relation to the total quantum of loan of ₹1 crore for a property sized 1,500 sq ft in the cities are too insignificant for the loanee.
But, in the periphery, most of the properties, depending on the income categories, become affordable as the price level is much less than the cities. Properties start from as low as ₹10 lakh in the periphery.
EXPLORING THE PERIPHERY
In the Chandigarh tricity, the periphery offers several options to the home buyers in terms of configuration, segments and builders. Areas falling under the Mohali district like Kharar-Banur-Landran road axis and Zirakpur are the hubs for properties for affordable housing.
Plot prices on Kharar-Landran road, which includes new sectors coming up in SAS Nagar and towns like Kharar, start at around Rs 16,000-Rs 17,000 per sq yard. A buyer can explore plots of sizes varying up to 300350 sq yard. Built-up independent duplexes, sized 90 sq yard to 100 sq yard can be explored at price range of ₹ 35 lakh to ₹40 lakh. In this area, 2BHK (bedroom-hall-kitchen) apartments are generally priced between ₹25 lakh to ₹35 lakh. In the new sectors of Greater Mohali area, apartments with 1,100 sq to 2,000 sq ft area are available in ₹50 lakh to ₹60 lakh. In the new sectors 1,200 – 1,700 sq ft sized floors are available in either G+2 or G+3 (ground plus 2 or 3) configurations. In the Kharar-Landran road area, 90 sq yard to 150 sq yard built-up houses are available.
In Zirakpur, buyers can explore plots ranging from 50 sq yard to 200 sq yard plots in the price range of ₹20 lakh to ₹40 lakh. Plot prices on an average vary between ₹20,000 per sq yard to ₹35,000 per sq yard depending on location. Buyers can get smaller sized apartments 2BHK starting from around ₹20 lakh. The average price range in Zirakpur varies from ₹2,200 per sq ft to ₹5,500 per sq ft. Though, most of the supply in this area is in the price bracket above ₹50 lakh.
Areas like Peer Muchhala and VIP Road in Zirakpur have the main concentration of floors. In ₹50 lakh to ₹60 lakh, the average size of a floor hovers around 1,500 sq ft. Most floors available in this area are bare shells. A buyer, generally, has to do work on the interiors, etc. In this budget, apartments of sizes 1,200 sq ft to 1,500 sq ft are available. Most of the new supply is located on the VIP Road, Peer Muchhala, and on the Chandigarh-Ambala national highway. In Zirakpur, 100 sq yard duplex are available in ₹50 lakh to ₹60 lakh range.
Dera Bassi offers still bigger plot sizes in the affordable price segment – plot prices range from ₹10,000 to ₹20,000 per sq yard. In this budget, 200 sq yard to 400 sq yard plots are available in the town.
It is a good place for a buyer to start his search for built-up house in this price bracket. A buyer can expect to get built-up duplex houses constructed on plot sizes of 100 sq yard to 125 sq yard.
These are generally priced in the range of ₹30 lakh to ₹45 lakh. Apartment prices range from ₹1,500 per sq ft to ₹5,000 per sq ft, though most of the supply is available in the lower end price bracket. Apartment sizes vary from 1,250 sq ft to 2,000 sq ft sized flats in this price range.
The infrastructure quality and basic amenities in the periphery have much scope to improve but when it comes to affordable housing and availing the benefits of the interest subsidy schemes then the periphery is much better option than the tricity.
In Chandigarh, Panchkula and SAS Nagar, even the smallersized properties are priced over ₹40 lakh.