New Real Estate Reforms And Affordable Homes (PMAY), RERA Act
New Real Estate Reforms: High real estate costs, delayed timelines among others have pushed buyers away. Thus, affordable homes, fixing both the demand and supply gap of housing units, and the supply of budget-friendly finance have been key priorities for the government.
To offer subsidised home loans under Pradhan Mantri Awas Yojana (PMAY) and Real Estate Regulation Act (RERA) have put affordable housing on the top of agenda, while simplifying buyer’s job of home buying easier. This reformist outlook is paving the way for pocket-friendly homes and capital that will usher in accountability. The 12-year low mortgage rates, and subsidies create the best-ever affordability conditions today.
Aiming to benefit close to 90% of the Indian population across categories, the Housing For All scheme aims to bridge both the gap in funding and supply; Pradhan Mantri Awas Yojana (PMAY) and Credit Linked Subsidy Scheme (CLSS) is granting 3-5% interest savings, and according infrastructure status to affordable housing and affordable housing programme.
National Housing Bank has been providing a steady source of refinancing to extend credit to weaker section of society while also supporting, low and middle income group buyers. These schemes now allow HFCs to access lower cost of funding from the regulator and then lend it at a fixed spread, helping HFCs and banks to cater to this segment profitably. When loans to developers become cheaper, buyers benefit.
Additionally, focus on information sharing and digitisation driven by Aadhaar-based eKYC verification has resulted in lower costs while speeding up turnaround time for home loan processing. The further increase in eligibility under the CLSS scheme, from income bracket of Rs 6 lakh to up to Rs 18 lakh (for one year), will make the benefits accessible to a sizeable urban and middle-income population.
The amount of delays in project completion is one of the major reasons contributing to high costs. With RERA coming into effect, home buyers interests remain protected. Nearly 19,000 projects across 27 cities will come under RERA’s purview bringing in greater accountability on sources of project financing and usage of project funds. The scope of hiding information about land, project, construction and progress will be eliminated, building trust for the buyer.
This means more transparency in dealings which was missing previously. This is bound to sow the seeds of ‘improving consumer confidence’ and is, in fact, bringing in fence sitters.
Customers are now no longer in the dark about project plans, as RERA ensures that they know clearly what they are paying for as against today’s practice of saleable area.
Source Link- http://www.dnaindia.com/personal-finance/report-enjoy-affordable-homes-with-new-real-estate-reform-2565606