The decision of granting infra status for the affordable housing segment along with the rebate in personal income tax will make developers shift their gears and develop affordable housing projects, says Deepak Kapoor, Director, Gulshan Homz.
Is the infra status for the affordable housing segment adequate to spur investments by the private sector? What outcomes do you anticipate through this government emphasis?
The announcement of infra status for the affordable housing segment in the Budget will open up new avenues for developers planning to offer budget housing units and will make it easy and comfortable for them to get finance from lending agencies. Affordable housing developers will now be eligible for various government incentives and subsidies, where this infra status could also mean that the government might come out with land parcels for such development in future. With the basic slab of income tax now reduced to half the effect, people will have access to higher disposable income which can now be utilised for saving and investment purposes, where real estate will look attractive.
Is it a feasible proposition now for infrastructure majors to get into the affordable housing sector?
First time home buyers will get deduction for additional interest of Rs 50,000 per annum for loans up to Rs 35 lakh sanctioned in 2016-17, where house cost does not exceed Rs 50 lakh. Lowered interest rates just ahead of the financial year closing could have allowed the buyers to plan their future investments, and the realty sector would have benefitted the most especially after the recent lending rate deductions by the banks. Basically right now the situation is in the favour of the affordable housing sector and for sure it is lucrative enough for real estate majors.
How does infra-status translate into incentives, special dispensation, and bankability? What additional incentives would accrue to investors getting into this infra-status driven affordable housing initiative?
The decision of granting infra status for the affordable housing segment along with the rebate in personal income tax announced by the government will provoke the developers to shift their gears and develop affordable housing projects, which is now sure to meet the demand as well. One major issue faced by various builders across the major Tier-1 cities of the country was the inventory pile-up. The tax break-up of one year post the receipt of the completion certificate for the project, for the unsold stock, offers a slight breather for the builders.
How will the infra tag accorded to affordable housing spur the concept of 'Housing for all'?
The affordable housing and 'Housing for all' missions have come up; the developer lobby across the country has shifted its gears towards developing budget houses majorly. Almost 50,000 units are getting ready to be delivered by 2022 in Gurgaon itself; and across the country, this number is multiplying at the rate of knots. This in the long run will allow the country to meet the demand against the shortage of budget homes and allow everyone to get a roof over their heads. According infrastructure status to the affordable housing segment is sure to induce more confidence in the market, both from the end users and investors. This will in turn affect realty pricing in the course of the coming years and soon we might witness price regulators in the realty sector as well in order to keep a tap on property prices.
- MANISH PANT