The stimulus package, which is most probably coming on Saturday, is expected to herald some good news for the ailing housing sector. Cheaper home loan rates will be extended to the Rs 30 lakh slab along with ECB norm relaxation. In an effort to infuse more liquidity in the sector, fresh funds will be made available to housing finance companies in through the package.
The government is not planning to cut interest rates of home loans any further in the current stimulus package. This benefit will be reserved for the next budget. Other measures which are going to make an impact on the realty sector in the budget of 2009 include tax benefits extended to the consumers to Rs 3 lakh fro Rs 1.5 lakh. Further steps that will be taken for the housing sector in the budget include benefits for the developers in the form of restoration of 80IB of the income tax act and affordable housing awarded infrastructure status.
Measures that will be implemented through the second stimulus package is meant to help both buyers and developers. ?Lowering of interest rates uptill Rs 30 lakh is likely to spur demand. Unavailability of liquidity is constantly hindering this sector. Relaxation of ECB norms is going to enable developers to raise cheaper funds from overseas,? pointed out a Bombay based analyst.
With affordable housing given infrastructure status the risk wightage will be reduced and as a result banks and HFCs will be more generous with lending to this sector. Currently banks consider real estate as a risky sector and as a result very wary about lending funds to it. The income tax benefit is also going to give the buyer reason to invest in a house.
Rohtas Goel, chairman, Omaxe is confident that the government will implement all these measures. When the realtors met Montek Singh Ahluwalia, deputy planning commission, last month they gave him a long wish list which included all the demands that are going to be fulfilled in two phases- the first set through the stimulus package and the second set in the budget. ?These measures, when implemented will give a boost to the sector,? said Goel.