MUMBAI: The government’s decision to provide interest subvention of 3% and 4% for loans of up to Rs 12 lakh and Rs 9 lakh, respectively under Prime Minister Awas Yojana (PMAY) is expected to boost low income housing in peripheral areas of urban localities across the country.
In rural areas a 3% subvention will be given for loans of up to Rs 2 lakh to build and expand existing house. The government has also decided to increase the number of homes to be built in rural areas under PMAY by 33%, Prime Minister Narendra Modi said in his speech on New Year’s Eve.
“This will provide a strong boost to mass housing in peripheral areas of all eight metro cities. Localities like Bhiwadi, Nimrana, Daruhera around Noida extension and Yamuna Expressway in the NCR region will see good demand for housing as average loan size for houses is between Rs 10-12 lakh. This will kick-start markets on the outskirts of Mumbai, Pune, Hyderabad, Bangalore, Ahmedabad and Chennai,” said Getamber Anand, President – CREDAI National.
“The Prime Minister has effectively made the EMI cheque smaller than the rent cheque for the affordable housing segment – a tremendously positive announcement coming on the back of many directed steps to realise the “Housing for All” objective. This with the Credit Guarantee for SMEs will ensure small business owner and the middle class salaried customer will be able to achieve progress in their business and move out of rented homes to own their own house,” said Gagan Banga, Vice Chairman, Indiabulls Housing Finance that has recently launched 100 city – smart city Home Loan product to provide affordable home loans and SME loans in smaller cities.
Under the government’s existing credit-linked subsidy scheme, beneficiaries of economically weaker sections (EWS) and low income groups (LIG) seeking housing loans are eligible for an interest subsidy at the rate of 6.5% for tenure of 15 years, or during the tenure of loan, whichever is lower on the initial Rs 6 lakh.
Credits ET Realty