Impact of Pradhan Mantri Awas Yojana
The real estate sector in India has weathered a slump, owing to a mix of various factors. There was a time when a potential home buyer would just be another person sitting on the fence. However, with affordable housing policies such as Pradhan Mantri Awas Yojana, the realty sector seems to be back on track now Today, while most realtors based out of the country’s metropolitan cities are sitting on unsold properties which often start from Rs.50 lakh or upwards, there is a dearth of as many as 20 million housing units, within the range of Rs.5-15 lakh, that would’ve had benefitted the less affluent, living in both the urban and rural parts of India. The PMAY, with its scope of loans up to Rs.12 lakh offered on an interest subsidy, aims to do just that; accommodate the poor and other economically weaker groups of the society. In doing so, it should be able to incentivize and encourage the realty sector to look beyond the affluent buyer segment based out of the cities. The carpet area (area to lay the carpet) is the total area that is enclosed within the walls of the house. The super built-up area, on the other hand, includes the ones that are not calculated within the carpet area such as balcony, lifts and other common spaces. Affordable housing schemes, such as the PMAY, are making it easy for the buyers to get a much better deal on their money. This, in turn, is also encouraging some of the leading developers in the real estate sector to test the affordable housing scheme waters – simply because of the fact that the super built-up to carpet area ratio will increase the average size of the unit by 20-30%. The four key features of the PMAY scheme – In-situ Slum Rehabilitation, Beneficiary-led Construction, Affordable Housing in Partnership and Credit Linked Subsidy Scheme – through their grants and subsidies, have resulted in increased investments in the affordable housing space, thereby propelling the real estate sector into action. Investments in the real estate sector have increased manifold in the affordable housing space since the second half of 2017. Private equity real estate firms have invested as much as USD 6.1 billion in the country, more than half dedicated towards affordable housing.
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