Re-financing of loans to boost affordable housing: JLL India

BANGALORE: Affordable housing in India is finally set to get the much-coveted infrastructure status. One crore houses are to be built in rural India by 2019, and this vital segment will now see cheaper sources of finance - including external commercial borrowings (ECBs). Re-financing of housing loans by National Housing Banks (NHBs) can give a further boost to the sector," said JLL India.

According to JLL India, a new Credit Linked Subsidy Scheme (CLSS) for the mid-income group with a provision of INR 1,000 crore in 2017-18 was announced even before Budget 2017-18. Extension of tenure of loans under the CLSS of Pradhan Mantri Awas Yojana (PMAY) was increased from 15 to 20 years, and the Budget also increased allocation to PMAY from INR 15,000 crore to INR 23,000 crore in the rural areas.

The qualifying criteria for affordable housing were also revised to 30 sqm and 60 sqm on carpet rather than saleable area in the four main metros and non-metros respectively. This effectively increases the size of affordable housing market across India. Moreover, the demonetization of high-value currency notes will cause land prices to ease in the next few years - especially in far-flung areas around Indian metros and the tier II and tier III cities. The Government's dream of Housing for All by 2022 appears a lot more attainable now.