Gujarat second in PMAY-Urban funds availed – ET RealEstate

AHMEDABAD: Gujarat has emerged as a prominent beneficiary under the Centre’s Pradhan Mantri Awas Yojana (Urban) as the state has received the second-highest central assistance after Uttar Pradesh.

Out of the total Rs 13,899 crore sanctioned, central assistance worth Rs 9,717 crore has been released to Gujarat under PAMY (U) as on January 25, 2021, shows data released by the ministry of housing and urban affairs (MoHUA).

Uttar Pradesh has seen the highest amount of central assistance (Rs 13,329 crore) being released to the state. Total assistance of Rs 27,342 crore has been sanctioned for Uttar Pradesh. The PMAY(U) launched in June 2015, is a flagship mission of the central government to ensure a pucca house to all eligible urban households by the year 2022. It is being implemented by MoHUA.

Apart from interest subsidy on home loans, financial assistance is also provided to eligible households under different components of the scheme. Most of the central assistance has been disbursed in form of a subsidy under PMAY(U)’s credit-linked subsidy scheme (CLSS).

According to the State Level Bankers’ Committee (SLBC), Gujarat, a subsidy of Rs 6,896 crore was disbursed to 2,89,684 crore beneficiaries across the state under the CLSS as on October 31, 2020.According to the ministry data, out of 7.5 lakh houses sanctioned to be built under the programme, construction of 5 lakh houses has been completed across the state since the launch of PMAY(U). The state also has the second highest number of completed houses after Uttar Pradesh.
Gujarat second in PMAY-Urban funds availed“Gujarat is one of the most urbanised and industrialised states in India. Hence, there is a good demand for urban housing in the state,” said Jaxay Shah, national chairman, Confederation of Real Estate Developers’ Association of India (CREDAI). “Factors such as robust urban and social infrastructure, state’s affordable housing policy, smooth co-ordination between the state and central government have further contributed to the strong performance of PMAY(U) in Gujarat,” he added.

According to industry players, enhancement in the carpet area for middle income group (MIG) categories of housing has further resulted in an increase in the number of beneficiaries. Within Gujarat, Ahmedabad has grabbed the largest of share — Rs 2,333 crore — of the released central assistance. The total assistance sanctioned for Ahmedabad is Rs 3,802 crore. Out of the total Rs 1.77 lakh crore sanctioned across the country, states and Union territories have been released an amount of Rs 84,387 crore.

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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.”

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. – 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.

“A 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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