100% FDI in affordable rental housing desirable: Hardeep Singh Puri

By: |
August 1, 2020 5:10 AM

On July 8, the government approved Affordable Rental Housing Complexes (ARHCs) as a sub scheme under Pradhan Mantri Awas Yojana (Urban) to provide ease of living to poor urban migrant.

At present, FDI in real estate is allowed via automatic route in under construction residential projects. At present, FDI in real estate is allowed via automatic route in under construction residential projects. (Representative image)

The government may allow 100% foreign direct investment (FDI) in affordable rental housing as it focuses on economical dwelling solutions for urban poor. “I’m for 100% FDI in affordable rental housing because (it gels with) our objectives, which are that we have to cater to a situation where urban population by 2030 would be around 600 million,” urban development minister, H S Puri said.

On July 8, the government approved Affordable Rental Housing Complexes (ARHCs) as a sub scheme under Pradhan Mantri Awas Yojana (Urban) to provide ease of living to poor urban migrant.

At present, FDI in real estate is allowed via automatic route in under construction residential projects. However, there is a lock-in-period of 3 years, calculated with reference to each tranche of FDI, and transfer of immovable property or part is not permitted during this period. The same is not allowed for completed projects. This was announced in 2017 when government came out with its consolidated FDI policy. Real estate brokerage is also eligible for 100% FDI under automatic route.

Since the government opened FDI in March 2005, FIIs account for a major share of investments in the real estate sector. In last 15 years, the sector attracted around $25 billion in equity investments from foreign PE investors, of which $16.6 billion coming in during 2015-19.

Speaking at the launch of Credai’s Awaas App and Naredco’s online portal HousingforAll.com, the minister said affordable housing is an integral part of government’s vision of ‘Housing For All’ by 2022. Puri also favoured creating a government-industry group to handle pressing issues before the sector.

The online platforms launched by Naredco and Credai will leverage technology and provide benefits to homebuyers in changing market practices by providing affordable and effective solutions. These serve as gateway for buyers from around the world to connect with developers and choose their dream homes from RERA registered projects.

Developers will offer 2.70 lakh ready–to–move–in houses for online sales to homebuyers in a first and biggest ever housing festival, which will begin soon. This festival is expected to unlock the affordable housing properties worth over Rs 1.21 lakh crore.

Naredco’s national president, Niranjan Hiranandani suggested “We have around 650 acres of salt pan land in Mumbai municipal corporation limits. There is a need to open up the land for construction of affordable and low-cost housing”.

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