Affordable Housing in Non-Metros To Get A Boost

Published: February 28, 2011

Low cost and affordable housing in non-metro regions is set to receive a boost following the finance minister in his budget speech announcing measures including the hike in housing loan limit for interest subvention.

In the Union Budget for 2011-2012, the existing scheme of 1% interest subvention has now been extended to Rs 15 lakh for house costing up to Rs 25 Lakh. Currently, the limit is Rs 10 lakh for house worth up to Rs 20 lakh.

On account of increase in prices of residential properties in urban areas, the budget also proposed to increase the existing housing loan limit from Rs 20 lakh to Rs 25 lakh for dwelling units under priority sector lending.

Making its focus on low income and economically weaker section clear, the budget also proposed to provide housing finance to targeted groups in rural areas at competitive rates, and enhanced the provision under Rural Housing Fund to Rs 3,000 crore from the existing Rs 2,000 crore.

“These measures are expected to yield better response from tier-II, III cities and towns. Distant suburbs where land cost is up to Rs 500 per sq ft and construction cost is up to Rs 1,500 per sq ft, these measures will make sense,” said Kumar Gera, chairman of Confederation of Real Estate Developers Associations of India.

He expects more developers to spot the opportunity of better cash inflows and undertake additional low income group housing projects.

Source: Economic Times

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