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Budget 2017: Infra status for affordable housing, 1 cr houses by 2019: Jaitley

  • Affordable housing gets a big boost
  • People from lower, lower-middle class can buy a house at affordable prices
  • Centre aiming at constructing one crore houses by 2019 for the homeless
  • Good news for companies like AU Housing, Gruh Finance and Repco
Budget 2017 Infra status for affordable housing 1 cr houses by 2019 says Jaitley

 

This is the much needed change in the real-estate sector which will help people of lower and lower-middle class people buy a house at affordable prices. But this will also increase in the involvement of private builders having their plan of constructing the houses for poor.

 

The government is aiming at constructing one crore houses by 2019 for the homeless. To make this plan a reality, allocation of Pradhan Mantri Awas Yojana has been raised from Rs 15,000 crore to Rs 23,000 crore. This will encourage home buyers and further boost participation from private players, he said.

 

Credit off-take towards affordable housing will help the first home buyers and developers who will have access to cheaper funding.

 

It is surely good news for housing finance companies like AU Housing, Gruh Finance and Repco as the government has announced that National Housing Bank will refinance individual loans worth Rs 20,000 crore in 2017-18. Additional refinance of Rs 20,000 crore from National Housing Bank and lower interest rates resulting from increased liquidity in the banking sector would add to the funds for the sector at lower costs to the ultimate consumer, he said.

 

This is the pet project of PM Modi who had promised to build 20 million houses for the homeless by 2020. 

 

Hailing the government's decision to grant infrastructure status to affordable housing segment, experts believe it will provide ample push for the sector as developers will now be able to get access to preferential and lower borrowing rates from banks.

 

"We must appreciate the fact that the government is very serious on the mission of housing for all and in the same light we have seen some extremely positive announcements in the budget today. Affordable housing getting infrastructure status will enable efficient supply of housing stock in the country and provide benefits associated with it," CREDAI national president Getamber Anand said.

 

PropEquity CEO and Founder Samir Jasuja said, "One of the key demand of the real estate sector has been to get industry status to get preferential and lower borrowing rates from banks. This announcement will surely provide ample push for the affordable housing sector in India, a key initiative under housing for all."

 

Finance Minister Arun Jaitley has also announced new credit-linked subsidy scheme for middle income group with allocation of Rs 1,000 crore in the Union Budget for 2017-18. Long term capital gains tax benefits on housing which could be availed after 3 years, has been brought down to 2 years.

 

Commenting on the Budget, Tata Housing Managing Director and CEO Brotin Banerjee said, "Easy and dedicated access to institutional financing, higher limit on external commercial borrowings will attract more investments and assure sustained growth of affordable housing in India, making it the core driving segment for real estate."

 

"On the other hand, long term financing at lower rates will reduce costs of construction for developers allowing them to pass on benefits to consumers. The new status will increase the resource allocation for the sector, catalysing housing supply and reducing the supply gap," he said.

 

CBRE Chairman – India and South East Asia Anshuman Magazine said, "While we are yet to read the fine print, this is indeed an important step to promote access to priority lending, thereby spurring supply of low cost housing units across various cities in India. Relaxation in area measurement as well as completion timelines to seek tax exemption are welcome steps."

 

 

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