On February 1, Finance Minister Arun Jaitley has made an announcement regarding a dedicated affordable housing fund under the National Housing Bank (NHB) in order to boost demand and supply of low-cost homes. This move has brought cheers to many prospective home buyers as they can now easily become a property owner.
As per the Government, by setting up Affordable Housing Fund, they have taken a huge step in attaining their goal of Home for all by 2022. In his Budget speech, Arun Jaitley assured that around 31 lakh affordable homes will be built for the common man residing in urban areas.
All about Affordable Housing Fund
- The fund is set up under the National Housing Bank and will help in providing affordable homes in urban areas to middle-income and lower-income groups
- Under this fund, the government will provide each buyer linked credit worth Rs 1 lakh to Rs 2.30 lakh
- One also has to pay a lower rate of interest of 6.5 percent against the current market’s housing interest at 10.5 percent.
The move was also welcomed by Government officials who are working under Real Estate Regulatory Authority. According to them, it will now take away the focus of private developers from luxury projects to affordable housing. Till now when it comes to affordable housing section, the private developers always look at the Delhi Development Authority (DDA) in Delhi or the Maharashtra Housing and Development Authority (MHADA) in Maharashtra. But after this announcement, they are now turning to the middle-income consumer.
Real estate experts feel that the tax incentives which the government is providing under this fund will very much help in boosting the affordable housing segment. Apart from tax incentives, the increase in carpet area, granting of infrastructure status as well as the setting up of a dedicated fund for housing under the NHB, would definitely increase more participation from private players in this segment.
According to a recent research by a Real Estate Rating & Research firm, many cities like Mumbai, NCR, Bengaluru, Pune, Chennai, and Hyderabad have shown an increase in the sale of houses under affordable housing scheme. Also, some say that the developers should also focus on small cities as compared to metropolitans as they have much population under middle-income and lower-income groups.
So, the announcement of a dedicated AHF will definitely go a long way in meeting the requirement of prospective home buyers.