Making Affordability a bit more Affordable

As promised by the Prime Minister in his address to the nation in early November towards taking the painful step of demonetisation in order to curb a lot of malpractices and simultaneously look towards boosting the economy with the cash surplus which gets deposited with the banks. This gift was finally announced post the closing day of the phase of demonetisation in the PM’s address. During the address, two new housing schemes were announced citing the fact that there are still millions of people who don’t own a property either due to affordability factor or high interest rates which subsequently increases the EMIs. For the urban poor, in 2017, a rebate of 4 percent and 3 percent would be provided on home loans uptoRs. 9 lakhs and Rs. 12 lakhs respectively. Also, for the new housing or extension of housing taken up on 2017, a rebate of 3 percent would be provided on home loans extending upto Rs. 2 lakhs. PM Modi further added that the number of houses being built for the poor under the Pradhan MantriAwaasYojana (PMAY) in rural areas was being increased by 33 percent.

With announcements such as these, we are inching closer towards fulfilling the dream of building 2 crore affordable housing units for the urban poor by 2022. When lending rates are reduced, it allows the market to create fresh demand, and in this case, developers across the country will focus on developing affordable housing units which will be supported by reduced lending rates, and gladly accepted by the buyers. Since the affordable housing and housing for all missions have come up, the developers’ lobby across the country has shifted its gears towards developing budget houses majorly. Almost 50,000 units are getting ready to be delivered by 2022 in Gurugram itself; and across the country, this number is multiplying at the rate of knots. This in the long run will allow the country to meet the demand against the shortage of budget homes and allow everyone to get a roof over their heads.

Speaking on the push for affordable housing in the country and various steps being taken to encourage the step, Avneesh Sood, Director, Eros Group says, “Affordability is one aspect of the real estate sector which has always kept people in confusion. The PM’s mission of Housing for All is more dedicated towards the comparatively weaker sections of the society wherein the families find it tough to afford a roof. In such a case, the prime focus is always on providing a roof, thus the basics of affordable housing were defined in the last Union Budget. Other than that, if you talk about a common man from the general masses planning a purchase in the real estate sector, the definition of affordability changes. In this case, it will purely depend on the purchasing power of the individual or the family in whole. In this case, once they start evaluating projects and whichever falls in their budget will be termed affordable for them. So, affordability, the basic perception needs to change as to how you look at this segment and once that happens, you will genuinely see affordability existent in Indian realty.”

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