Affordable Housing Schemes Elevated to Infrastructure Status
In a bid to achieve the ambitious 'Housing for All by 2020' mission, the Indian government has proclaimed that affordable housing schemes will be granted infrastructure status until 2022. This pivotal move, announced on January 1, is poised to significantly benefit developers such as Ashiana, Housing, and Puravankara, particularly those with projects in Delhi/NCR.
Implications for Developers and Homebuyers
- Reduced Costs for Developers: With the new infrastructure status, developers can anticipate lower loan costs, mitigating margin pressures.
- Enhanced Affordability for Homebuyers: The combination of infrastructure status and interest subventions is expected to make apartments for sale in Noida more affordable, as noted by Nidhi Seksaria, Advisory Partner & Leader – Real Estate, BDO India LLP.
Market Reaction
- Ashiana Housing: Saw a notable 15% increase in trading at Rs 163.
- Puravankara: Upticked by 3%.
- Housing Finance Companies:
- Gruh Finance: Recorded a 1.4% increase.
- Repco Home Finance: Surged nearly 2%.
Strategic Adaptations by Builders
To align with the government's affordable housing targets, builders are likely to:
- Increase the supply of apartments.
- Optimize amenities to lower costs.
- Navigate intensified competition, with thousands of new flats in Noida being constructed and ready for occupancy.