Gurugram: Builders seeking fee from buyers to allot affordable houses? – ET RealEstate

GURUGRAM: Affordable housing projects have come under the scanner of the department of town and country planning (DTCP) in the wake of complaints that many developers have been demanding a premium from potential homebuyers in the name of assured allotment.

In Gurugram, there are currently around 91 affordable housing projects at different stages of construction. As per existing norms, allotment of units in affordable housing projects can be done only through a draw of lots.

Officials said that DTCP will soon ask all the developers of affordable housing projects in the city to share details of all allotted and unallotted units, following complaints that many of them are charging Rs 2-10 lakh as premium for confirmed allotment. The government has fixed prices of units in affordable housing projects.

โ€œIt has come to our notice that some developers are charging from buyers over and above the allotment rate fixed by the government under the affordable group housing policy. We have directed DTP (enforcement) to take necessary action,โ€ senior town planner (STP) Sanjeev Mann told TOI.
Gurugram: Builders seeking fee from buyers to allot affordable houses?โ€œWe are also going to write to all developers who are working in the affordable housing segment to share the details of units they are developing, how many of them have been allotted and number still lying unsold,โ€ said Mann. โ€œThere are enough units available in the market and people need not pay more for the same.โ€

In fact, state government has given licences for development of 95 affordable housing projects in Gurugram and Rewari, of which 91 are in Gurugram.

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Affordable housing top priority for the government: Finance Minister – ET RealEstate

NEW DELHI: Finance Minister (FM) Nirmala Sitharaman while presenting Union Budget 2021 said that โ€˜Housing for Allโ€™ and affordable housing are priority areas for the central government.

FM allocated Rs 54,581 crore to Ministry of Housing and Urban Affairs in the Budget 2021. The government also extended the additional tax deduction of Rs 1.5 lakh home loan interest to March 31, 2022.

In the July 2019 Budget, the government provided an additional deduction of interest, amounting to Rs 1.5 lakh, for loan taken to purchase an affordable house.

Sitharaman proposed to extend the eligibility of this deduction by one more year, to March 31, 2022. The additional deduction of Rs 1.5 lakh shall therefore be available for loans taken up till March 31, 2022, for the purchase of an affordable house.

Further, to keep up the supply of affordable houses, FM proposed that affordable housing projects can avail a tax holiday for one more year โ€“ till March 31, 2022.

To promote supply of Affordable Rental Housing for migrant workers, Sitharaman proposed to allow tax exemption for notified Affordable Rental Housing Projects.

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ICRA expects recovery in housing demand to continue due to improved affordability – ET RealEstate

NEW DELHI: Housing affordability in India has historically been low, with unit pricing remaining high due to rising land costs, zoning and floor indices-based restrictions, and high transaction costs and taxes.

In recent years though, the government has been taking steps towards moderating real estate transaction/finance costs and taxes, through measures such as higher income tax incentives for first time buyers in the form of housing loan interest deduction, credit-linked subsidy schemes under PMAY for purchases in the affordable and mid segments, etc.

Post the onset of covid-19, a steep reduction in home loan rates, together with other state and central government incentives, has further supported affordability and in turn, housing demand, thereby stimulating some recovery from post-covid lows, said ICRA Ratings, a rating agency.

Housing sales volumes, which had declined by 62% year-on-year in Q1 FY2021, bounced back considerably in subsequent quarters, with a quarter-on-quarter growth of 60% in Q2 FY2021 and further quarter-on-quarter growth of 53% in Q3 FY2021, limiting the year-on-year dip to 7% in Q3 FY2021, according to the rating agency.

Shubham Jain, senior vice president and group head, ICRA, said, “In recent quarters reduced home loan rates, attractive payment schemes/discounts and reduction of stamp duties in certain key states on the back of Covid-19, has significantly brought down housing costs and stimulated housing demand.โ€

Repo-linked lending rate (RLLR) for home loans have touched a historical low, with the rates dropping below 7%. Banks are also offering discounts on processing fees etc.

Given the prevailing economic uncertainties, repo rates are likely to remain low over the near-to-medium term, and thus home buyers may continue to benefit from the same into FY2022.

Certain states, i.e. โ€“ Maharashtra and Karnataka have extended 2-3% reductions in stamp duty for a limited time, which has spurred housing registrations to reach all-time highs in some areas.

The Maharashtra government has also reduced construction premiums for developers by 50% up till December 2021, and in turn, has required the developers availing of this scheme to pay stamp duty on behalf of the buyers, which is expected to further boost demand in the region.

โ€œA focused attempt to address affordability through reduced housing costs for the home-buyer would allow for the recent demand uptick to continue, and thereby enable the recovery of housing demand to pre-Covid levels within FY2022,” added Jain.

The upcoming budget 2021 may also add a stimulus by increasing income tax deductions and relaxing some of the caps currently applied.

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Gurugram: 50% paid, but flat construction yet to start in affordable housing projects – ET RealEstate

GURUGRAM: The mismatch between construction and money collected by developers from buyers has emerged as the biggest area of concern in the affordable housing segment. This is because unlike regular group housing projects where payment is linked to the status of construction, investment is time-bound in the affordable segment. And because of this, a number of developers have collected more than 50-60% of the entire amount but construction is yet to start at their project sites.

Flooded with such complaints, the department of town and country planning (DTCP) is considering making an amendment to the affordable housing policy of the state to link the payment with the status of construction. In some cases, the department has already directed developers to stop collecting payment from buyers unless they exhibit the development in construction work proportion to the amount collected from investors.

Currently, homebuyers in the affordable housing segment have to make 5% payment at the time of applying for the flat, another 20% at the time of allotment, and the remaining 75% is to be paid in six monthly instalments over the next four years. โ€œI booked a flat in OSD Golf Heights in Sector 69 in 2018 and till March 2020 made more than 50% of the payment. However, at the project site, there has been barely any construction, despite a 2022 deadline. DTCP has now barred the developer from accepting any more payments,โ€ said Gaurav Narang, a buyer.

In fact, a survey by DTCP has revealed that the pace of construction at many affordable housing project sites in Gurugram is slow. However, the developers have been taking payments from the allottees regularly. In some cases, developers have collected upto 65% of the entire amount. Usually, developers start construction at the site after obtaining environment clearance or the approval of the building plan that often takes up to a year.
Gurugram: 50% paid, but flat construction yet to start in affordable housing projectsโ€œSo, we have made a request to the director of the town and country planning for making an amendment to the policy to make it construction linked,โ€ said senior town planner (STP) Sanjeev Mann.

Chairman of Signature Global, Pradeep Aggarwal, however, said that the delay is caused due to two reasons โ€“ fundamental problems and developer-specific problems. โ€œIn 2019, on the direction of NGT, construction was stopped between October and December. This year, Covid-induced lockdown disrupted the construction activities for six months,โ€ he said.

โ€œMoreover, the cost of construction materials increases over the years, but the cost of units remains unchanged as the government has fixed the price. Getting an extension of licence is also expensive in the affordable segment. So, the delay will not benefit the developers of affordable housing,โ€ he added.

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