Under Pradhan Mantri Awas Yojana (urban), the centre aims to provide affordable houses to all by 2022. According to a recent move by the centre to increase the carpet area for residences eligible for interest subsidy under the Credit-Linked Subsidy Scheme (CLSS) has come as a benefit for the affordable housing sector in Karnataka. However, this scheme will applicable to the Middle Income Group (MIG).
The carpet area of houses has been raised from 968 sq ft to 1,300 sq ft under the MIG-I category and 1,200 sq ft to 1,615 sq ft under MIG-II segment.
According to Adarsh Narahari, secretary, Credai, Bengaluru, “The move will provide an impetus for both home buyers and developers. Under the MIG-I category, beneficiaries whose annual income is between Rs 6 lakh and Rs12 lakh can avail a four percent interest subsidy on a loan of up to Rs 9 lakh. For the MIG-II category, beneficiaries with an annual income of Rs 12 lakh to Rs 18 lakh get an interest subsidy of three percent on a loan of up to Rs12 lakh. Since the benefit is provided upfront, the down payment reduces. Therefore, more customers will be eligible to buy homes.”
Endorsing his view, Kapil Mohan, principal secretary, housing department, said, “The move will help middle-income buyers. It will also help the sector clear unsold homes. The increase in carpet area may not be of much benefit in Bengaluru considering the high prices of land. But it is expected to be a boon for affordable housing on the outskirts of Bengaluru and tier-II cities.”
Developers believe the move will boost sales. “We are optimistic that there will be an increase in the number of customers who want to reap the benefits of this scheme. It will help developers clear stock and speed up new launches,” said Viswa Prathap Desu, senior vice president, sales and marketing, Brigade Enterprises.
Kishore Jain, managing director, Jain Heights Structures, said, “The new rule will cover many ongoing projects under PMAY and stretch the market size. Such incentives will boost the real estate sector and will result in new projects and employment generation as well.”