Awareness is the key to affordable housing

As affordable

housing

got the infrastructure status, there is a excitement amongst developers and banks for this limited-time subsidy. But there’s an underlying fear as well. With Prime Minister Narendra Modi announcing the Credit-Linked Subsidy Scheme (CLSS) for middle income groups (MIG) as well as the economically weaker section (EWS) and low-income groups (LIG), stakeholders fear that the scheme may not find many takers due to lack of awareness.

The scheme, which is valid for a year under the central government’s Housing for All mission, was announced on December 31, 2016, for MIG 1 & 2.
The offer, which also aims to provide benefits to developers on construction of affordable housing units, will create an extremely positive impact on the real estate sector. “The CLSS will boost demand for affordable housing and will be a game-changer. That is why its awareness among consumers is of paramount importance. This makes it the best time to buy an affordable house in urban India,” said Amrit Abhijat, Mission Director, Pradhan Mantri Awas Yojana (PMAY) and JS (HFA).

Dr P Jaipal, Sr Executive Director, HUDCO, adds, “It is for the first time that MIG housing has found a place in the affordable segment.”
However, in this case time is money. “If we struggle to interpret the law for a long time then time will run out. The industry needs to be facilitated to shift its focus to MIG and take advantage of the scheme, or the next year when the scheme is appraised, the verdict will be that it is not a success,” adds Jaipal.
The market sentiments on CLSS are indicative as HDFC MD Renu Sud Karnad said, “At this stage, it is difficult to quantify the total number of home loans under CLSS since the MIG scheme was launched last month. But for the EWS/LIG category, CLSS was launched last year, under which we have provided loans worth Rs 400 crore to over 2,900 customers and have granted subsidies worth Rs 58 crore.”

Will liberalising paper work boost demand?

However, Karnad further added, “But the enquiry levels for CLSS for MIG have been huge. I think this scheme could be the catalyst to bring about a revival in the housing sector, which in turn will lead to a very positive impact on the economic growth as almost 270 big and small industries depend on the housing sector. This coupled with benefits provided to developers on the construction of affordable housing, will have a domino effect across different price points from mid to high cost housing.”

B Sankar, General Manager (Network-1),

State Bank of India

, adds, “Currently, it is difficult to quantify enquires from MIG against LIG. But for the public sector banks, enquires from LIG for CLSS subsidy are generally low, purely because they don’t have the requisite documents in place, which may not be the case with an MIG applicant. To make it successful, the

Reserve Bank

should liberalize the document requisitions for the LIG segment.”
While bankers argue that they are doing their best to educate consumers through various platforms, including seminars and advertisements, the desired effect of information dissemination is yet to be received. “We have targets, hence we have to advertise. But the time is too short. We only have two options, either the government will have to extend the deadline or they have to come up with extensive marketing using social, print and television mediums to educate consumers,” sums up Sankar.

Thus, it is evident that all stakeholders need to work collectively to achieve the goal. This will not only lead to an uptick in the real estate market but also help in achieving the Prime Minister’s Housing for All dream.


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