Residential apartments that are supported the program Pradhan Mantri Aawas Yojana, is likely to have concession on home-loan interest according to the latest announcement of PM Modi. This is a time for the potential buyers to do cartwheels who have avowed their decision to invest in low budget flats in Kolkata. According to the recent report central govt. will calibrate the classification of infrastructure segment in their imminent LIG or affordable housing apartment. Experts say that this is supposed to be a significant move that would scale down the cost for the developers and engage investors as well towards these types of developments in specific.
Speaking about this Pradhan Mantri Aawas Yojana PM Narendra Modi announced special consideration on interest rates for low-cost housing loans under the aforementioned program. “If we want housing for all by 2020, re-categorizing affordable housing as infrastructure is essential. The government had sought feedback about this about a week ago,” a person who is a potential buyer of the development said. He also added, “I see this happening in the upcoming budget.”
HUPA has been seen pushing PM’s dream housing project of providing about 20 million houses across the country within 2020. IT has got across to the officials of senior finance ministry and the Reserve Bank of India as well for feedback on the projected modification and how to stop it from being mistreated. “These projects could have a dollar-denominated debt and offer a return of 4-5%. This would work well for both domestic developers as well as foreign investors,” an expert said.
Our Outlook– Infrastructural status for low-budget housing is a skillful concept. Resource allocation will have a boost with the execution. It will hike the supply chain against the backlog. This huge project needs to have a policy agenda on an obvious ground, which will help to turn the project approval and deliverance into a fair and transparent deal. In the developed market real estate brings in half of the GDP. Again the moderation in home-loan interest and tax-rebate will be backing the demand quotient to rev up.
At the same point of time builders and developers have been going through a harsh time ever since the announcement of currency ban as they are having some obtained huge amount of loan from the financial market earlier on a higher level of interest. On the other hand banks and other financial companies are now indisposed to lend money to them after the 500 and 1000 rupee note ban declaration.
“If affordable housing is given infrastructure status, it would lower the borrowing cost for the developers. Also, regulations should be simplified to directly borrow foreign debt, which can cost around 4-5% on dollar return,” said Hemal Mehta, a partner at Deloitte Haskins & Sells.
Set of laws will have to be altered so that low-cost housing projects do not attract unhelpful taxes but easier project investment even from investors outside India. An investment from foreign pension funds and insurance companies in this low-budget segment is foreseen by the experts.
_ LNN( Liyans News Network)