Hike in carpet area to help middle income buyers: Realtors

New Delhi: Realtors' body CREDAI and NAREDCO on Thursday hailed the government's decision to hike carpet area of houses eligible for interest subsidy under the Pradhan Mantri Awas Yojana-Urban, saying the move would help middle income buyers and help the sector in clearing unsold homes.

NAREDCO's Chairman Rajeev Talwar and President Niranjan Hiranandani said this decision would help in meeting the aspiration of millions of MIG (middle income group) home buyers.

"This decision of government, besides helping in clearing unsold stock, will also encourage developers to launch new projects and boost economy, GDP growth and employment," they said, adding that the move would now bring the entire demand for affordable housing under the interest subvention scheme.

CREDAI's President Jaxay Shah said: "Housing for All by 2022 has taken a huge leap forward by the increase in unit size of MIG Houses under Credit Linked Subsidy Scheme."

"The average middle class in smaller towns and cities would now be able to afford bigger and better quality homes than before," Shah added.

The Cabinet today approved the enhancement of the carpet area of houses for the middle income group (MIG) category under the Pradhan Mantri Awas Yojana-Urban (PMAY-U).

Under the MIG-I category, the carpet area has been enhanced from 90 sq meter to 120 sq meter. Under the MIG-II segment, it has been raised to 150 sq meter from 110 sq meter.

Under the MIG-I category, a 4 percent interest subsidy is provided to the beneficiaries having an annual income of Rs 6-12 lakh and up to Rs 9 lakh loan. Under the MIG-II category, the beneficiaries with an annual income of Rs 12-18 lakh get 3 percent interest subsidy on loans up to Rs 12 lakh.

Commenting on the development, Tata Housing MD and CEO Brotin Banerjee said: "After the extension of interest subsidy under the CLSS scheme to MIG, the decision to approve an increase of carpet area eligible under this scheme will be definitely an important financial impetus for buyers looking at ready to move homes, especially in high-density cities."

Ramesh Nair, CEO and Country Head, JLL India, said: "In line with promoting the Housing for All agenda on a more inclusive basis, the central government has made further modifications to the CLSS scheme for Mid Income Group."

Anshuman Magazine, Chairman, India and South East Asia, CBRE, said this move is set to attract more buyers as they will benefit immensely by getting bigger homes in accessible rates.

"To achieve the vision of 'Housing for All', such schemes and benefits open up the market for buyers and further strengthen the spirit of the sector," he added.

Gagan Banga, VC and MD Indiabulls Housing Finance Ltd, said the Cabinet's decision is a massive positive for the macros of housing.

"The home buyer now has a larger pool of prospective houses to choose from. The fence sitters specially, who were delaying their home purchase will now be given a further push," he added.