The move has come in the wake of the recent announcement made on realty sops by the union finance minister whereby developers of affordable housing projects (units of 1,000-1,500 sq ft) have been granted a tax holiday on profits from projects initiated in the 2007-08 financial year which will have to be completed by March 2012.
Mumbai-based Lodha Group has about 4,500 acre of land just to develop affordable housing projects which will be done much more speedily now. Abhishek Lodha, chairman, Lodha Group told FE, We have been asking the government to incentivise affordable housing and we are very glad that the FM has finally stepped in after the budget to promote medium interest subsidy and tax holiday. Now, we will look at doubling the number of units of affordable housing to home buyers.
Industry experts believe that the overall effect will only be noticeable in smaller cities, where homes costing below Rs 20 lakh are still procurable. In larger cities such as Mumbai, residences admeasuring 1000-1500 square feet can by no yardstick be considered affordable in any case.
According to Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSalle Meghraj (JLLM), We expect a significant perk-up in transaction volumes in tier-II and tier-III markets; this is significant, because these markets had been perceived as losing steam of late. Therefore, we are once again looking at the prospect of a holistic and balanced growth pattern.
According to Niranjan Hiranandani, managing director, Hiranandani Constructions, Any concession is beneficial in todays difficult times. In fact in China, more rigorous concession is given on lower base rates which is quite beneficial. India is still lagging behind when compared to China.
As regards interest subsidy of 1% to home loans up to 10 lakh, builders opines, this will make home loans not only cheaper but also affordable particularly for those who have limited means and opt for the small house. This will generate a greater demand for low cost and affordable houses and will be beneficial to the real estate developers.
Navin Raheja, managing director, Raheja Developers said, more and more people particularly from the lower and middle strata of the society will be able to own a house of their own. This will also provide fillip to the real estate as demand for costlier houses is practically not much during the present recessionary state. Its thus time to cheers for certain developers who have been focusing at extended suburbs and certain parts of metros to develop affordable housing projects.
According to Nayan Shah, managing director, Mayfair Housing, We will be coming up with more affordable housing projects and offer 400 units in new areas, instead of 200 units we are currently offering in extended suburbs of Mumbai and other metros as well.