Expectations for Affordable Housing to Continue Flourishing in 2020
Feb 04, 2020 Real Estate News
The Modi government has set up a goal ‘Housing for All by 2022’, and it is expected that in 2020, the trend to invest in affordable housing will continue making the sector flourish.
Indian economy continues to the fastest growing economy in the world despite the international economic conditions and the fact that the current financial situation of the country has fallen from 5 percent to 4.5 percent.
Understanding the growing concerns for the growth of the economy, the government has announced some measures like reduction in reduction in the corporate tax rate to 22 percent from 30 percent. The government has also announced the recapitalization of private sector banks.
The recent state of the realty sector of the country is due to the fact that the sector has been under tremendous pressure for years before. According to the reports from the nine key real estate markets of the country, the sales and project launches had reduced from July to September in 2019. Compared to the previous financial year, in 2019 the sales in the sector decreased by 25 percent while the project launches reduced by 45 percent.
Affordable housing to the rescue:
Amidst the slow sales in the sector, affordable housing has seen a surge in sales. In 2019, the total of 65,799 affordable units was sold. The real estate market of Mumbai has seen the highest sales in the country in terms of affordable housing sales with almost 21,000 units being sold in 2019, followed by 13,000 units sold in Pune.
The surge in sales was also due to the additional tax deduction of Rs 1.5 lacs for the first-time buyers, the government announced in Budget 2019.
Affordable housing will continue to grow:
To achieve their goal of ‘Housing for All by 2022,’ it is expected that the government will continue to make the efforts in the affordable housing department to boost the sales. With the tax advantage and subsidy, the homebuyers are also open to investing in the affordable housing segment.
State government policies will act as a required catalyst:
The land is a state subject and to boost the sales in the affordable department, many states have launched their own policies that will benefit the homebuyer. It is expected that the state government’s policies for the same will act as the required catalyst to boost sales.
Newer technologies:
To finish the construction speedily, the builders are employing newer construction technologies that are not only reliable but also environment-friendly.
PPP to gain momentum:
With the current economic and financial situation, the government cannot alone attain the target of ‘Housing for All by 2022’. The government will need help from private builders and developers. Many developers have shown interest in affordable projects and find it lucrative. In September 2017, the government announced the comprehensive public and private partnership models for private investment in the affordable housing on private lands.
Under one model the government extends the centre’s assistance of Rs 2.67 lac per house as the interest subsidy under CLSS on bank loans as upfront payment component on PMAY. In the second option, the government provides the assistance of Rs 1.5 lacs per house for the buyers who do not wish to take the home loan.
Indian economy continues to the fastest growing economy in the world despite the international economic conditions and the fact that the current financial situation of the country has fallen from 5 percent to 4.5 percent.
Understanding the growing concerns for the growth of the economy, the government has announced some measures like reduction in reduction in the corporate tax rate to 22 percent from 30 percent. The government has also announced the recapitalization of private sector banks.
The recent state of the realty sector of the country is due to the fact that the sector has been under tremendous pressure for years before. According to the reports from the nine key real estate markets of the country, the sales and project launches had reduced from July to September in 2019. Compared to the previous financial year, in 2019 the sales in the sector decreased by 25 percent while the project launches reduced by 45 percent.
Affordable housing to the rescue:
Amidst the slow sales in the sector, affordable housing has seen a surge in sales. In 2019, the total of 65,799 affordable units was sold. The real estate market of Mumbai has seen the highest sales in the country in terms of affordable housing sales with almost 21,000 units being sold in 2019, followed by 13,000 units sold in Pune.
The surge in sales was also due to the additional tax deduction of Rs 1.5 lacs for the first-time buyers, the government announced in Budget 2019.
Affordable housing will continue to grow:
To achieve their goal of ‘Housing for All by 2022,’ it is expected that the government will continue to make the efforts in the affordable housing department to boost the sales. With the tax advantage and subsidy, the homebuyers are also open to investing in the affordable housing segment.
State government policies will act as a required catalyst:
The land is a state subject and to boost the sales in the affordable department, many states have launched their own policies that will benefit the homebuyer. It is expected that the state government’s policies for the same will act as the required catalyst to boost sales.
Newer technologies:
To finish the construction speedily, the builders are employing newer construction technologies that are not only reliable but also environment-friendly.
PPP to gain momentum:
With the current economic and financial situation, the government cannot alone attain the target of ‘Housing for All by 2022’. The government will need help from private builders and developers. Many developers have shown interest in affordable projects and find it lucrative. In September 2017, the government announced the comprehensive public and private partnership models for private investment in the affordable housing on private lands.
Under one model the government extends the centre’s assistance of Rs 2.67 lac per house as the interest subsidy under CLSS on bank loans as upfront payment component on PMAY. In the second option, the government provides the assistance of Rs 1.5 lacs per house for the buyers who do not wish to take the home loan.
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