How Revised Home Loan Limits Are Affecting The Affordable Housing Sector In Kolkata?
Over a past few years, development and infrastructure have seen a huge progress in Kolkata. It has witnessed a major change in the real estate sector. Real estate developers in Kolkata are coming up with never-seen-before projects in the city of joy and in the outskirts tagged with latest amenities that will compel the home seekers to get perplexed to choose between any one of them. What makes them more irresistible is their affordability. Luxury projects are now affordable too. With the latest declarations made by the Government and RBI, affordable housing has taken a new turn. These apartments in Kolkata are the epicentre for real estate investments that also attract home buyers who want to avail home loan facility for easy transactions.
In an attempt to promote low cost and affordable housing, RBI has revised the housing loans as Priority Sector Lending. PSL provides cheaper rates of interest than other home loans.
Presently, residential projects under 35 lakhs in metropolitan cities and 25 lakhs in other centres are considered under priority sector lending. These are eligible for loans up to 28 lakhs in metropolitan cities and 20 lakhs in other centres.
I a recent declaration by RBI, housing loans that qualify under PLS have been revised to 35 lakhs and 25 lakhs in metropolitan and other centres respectively. However, housing units with an overall pricing of more than 45 lakhs and 30 lakhs in metropolitan and other centres respectively, shall not be treated under priority sector at all.
In keeping with the Pradhan Mantri Awas Yojna, the loan facility are made available to the Economically Weaker Sections and Lower Income Groups with an annual income of 3 lakhs and 6 lakhs from 2 lakhs per annum.
How will this affect the residential real estate sector?
The financial year 2018 has seen a growth of 16% in the housing credit sector which has led mortgage penetration to 10% from 9.5% for the first time. The affordable housing segment has reached 39% housing credit in March 2018 with the invasion of some eminent real estate developers in Kolkata coming up with attractive offers and projects in the suburbs too. As predicted by ICRA the overall Non Performing Assets shall not exceed 1.5 per cent in this financial year.
With increasing desire for owning a home that is affordable and luxurious at the same time, many junior and mid-level executives looking for well-connected housing projects will be highly benefitted from the revised loan structure. Especially those buying a home for the first time belonging to the EWS and LIG section can now avail these schemes. This, in turn, shall boost the demand for real estate investments in the affordable housing sector.
Some developers who are coming up with projects in Rajarhat and Newtown areas are foreseen to be highly benefitted from this demand too. These are well-connected areas with an upcoming metro station and close proximity to the airport as well. Some good mentions are Galaxia, Sinjini, Basanta, The Indiana and Rajotto. The Rajarhat and Newtown area is very well connected to Salt Lake, IT hub and educational centres as well as top-notch health facility centres. Along with being the special economic zone of Kolkata, this area has an enormous scope of development in the coming 5 to 10 yearsβ time which is getting a fillip with the invasion of affordable housing recently.
