Home Masterbuilder Increase in priority sector lending limit likely to prop up affordable housing

Increase in priority sector lending limit likely to prop up affordable housing

affordable housing

RBI has decided to revise the housing loan limits for priority sector limit from Rs 28 lakh to Rs 35 lakh in metropolitan centres with population of 10 lakh and above, and from existing Rs 20 lakh to Rs 25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs 45 lakh and Rs 30 lakh.

“This is a big boost for the first-time home buyers in metros who are looking to buy properties in the affordable segment. Besides getting subsidy benefits of Rs 2.68 lakh from the central government under schemes like Pradhan Mantri Awas Yojna, owning a house in the metros will soon become a reality for many,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

However, the central bank has also raised red flag over rising delinquencies and hints at lesser loan to value of the property.

Lower home loan interest rates and necessary impetus by the government to affordable housing have been helping in pushing sales in this category. The government has supported the housing sector through affordable housing fund, lower Goods & Services Tax (GST) rates, increased tenure of loans under Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of up to 645-sq-ft carpet area.

Khushru Jijina, MD, Piramal Finance & Piramal Housing Finance is also of view that the decision would give a boost to affordable housing real estate sector and help in economic growth.

According to rating agency CRISIL, the proposed move to revise the upper limit for housing loans to qualify as priority sector loans (PSL) loans…would enable a greater proportion of housing loans given out by banks to qualify for PSL and would be positive for banks. As of April 2018, 37% of housing loans given out by banks qualified for PSL, CRISIL added.

Info- https://realty.economictimes


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