Affordable housing has been touted as the need of the hour by all the stakeholders of the real estate sector from time immemorial, finally signals of affordable housing becoming a reality in India has started to show. After the Budget 2014 announcing measures to make housing more affordable for the masses, the very first steps towards implementation of the same has been taken. The Reserve Bank of India (RBI), on Tuesday, 15th July 2014, announced a series of measures which would ultimately propel the agenda of affordable housing and ‘housing for all by 2022’. As per the RBI notification, the banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure and affordable housing. These bonds would be exempted from regulatory norms such as CRR (cash reserve ratio) and SLR (statutory liquidity ratio). This means that banks can lend at a lower rate, hence promoting affordability. In addition, RBI has proposed that in addition to small value loans, individual home loans up to Rs 50 lakh (for houses priced up to Rs 65 lakh) in metros (Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad) and loans up to Rs 40 lakh (for houses priced within a bracket of Rs 50 lakh) in other centres will be considered as affordable housing. These two measures together would propel development of affordable housing. “This will help developers to mobilize cheaper finance for development of affordable housing and would result in reducing prices for housing in the long term. It is expected that the home loan rates may also come down because of this move,” stated Navin Raheja, Chairman, NAREDCO. “It is a welcome step. This would lead to lower interest rates for affordable housing projects,” added Lalit Jain, chairman, CREDAI. However, Jain complained that the cities such as Pune, Ahmedabad and Lucknow should have been considered with the metro cities. Apart from developers, other industry experts were also positive about this step. “It seems a positive move for the overall housing sector especially for the end users in cities such as like Bangalore, Pune, Chennai, Gurgaon and NOIDA as these cities offer a number of properties in the budget range specified by the RBI,” said Surabhi Arora, associate director, Research Colliers International. Well, the government, which had won the general elections with a clean majority, seems to be serious about the huge responsibility vested in them by the ‘janta’. Measures such as this show that this government intends to differentiate itself from the others by actually implementing what was promised. So, would affordable housing now become a reality? Let’s hope so!
Posted on: Sun, 20 Jul 2014 03:45:39 +0000
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