Upcoming budget likely to boost affordable housing
Delhi- Focusing towards the requirement of the middle class buyers, the upcoming budget is likely to give a boost to the affordable housing sector.
The government’s main intention will be to push the number of homes with price tags around Rs 20 lakh. It can be achieved through offering incentives like tax breaks, easy loans, etc that may be provided for low-cost homes.
The finance ministry is also concentrating on bridging the gap between demand and supply in affordable housing category. It is looking for resurrection in the growth of affordable real estate market which would further revive the overall economic growth which is currently beaten by high interest rates, inflation and sluggish demand.
A senior source of finance ministry said that the ministry is focusing on all possible channels for economy’s growth of which housing plays an important role. Revival of housing sector will surely give a boost to other allied sectors too and that is the reason for the ministry to showing interest towards realty sector, he added.
Due to very high rates of properties in the metropolitan cities of India, developers are more interested to invest in peripheral areas such as Bhiwadi, Bawal and Manesar in NCR region and Ambivili and Karjat near Mumbai. Thus, many affordable housing projects in India have been coming up in such areas and are turning them to be new hotspots for this segment.
Since the developers end up spending very high in city areas on land and other input costs, they are reluctant to reduce prices for projects in the city limits. Because of all these issues, though there is huge demand for affordable housing projects, developers are investing in high-end segment. So now the government is making efforts on providing incentives to develop the affordable segment.
The finance minister directed banks to provide better home loans to borrowers, particularly for the buyers seeking loans within the Rs. 20 lakh category. Even the Indian Banks’ Association is studying ways to facilitate and ease funds to the real estate majors to enable them to complete pending projects.
In order to facilitate robust developers, the Reserve Bank of India (RBI) allowed external commercial borrowings (ECBs) up to $1.0 billion (Rs. 5,500 crore) for low-cost housing projects. ECBs can make loans cheaper for Indian firms as interest rates in advanced economies are low.
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