The Union Cabinet has approved the increase in the carpet area of houses under the government’s affordable housing scheme.
The government has increased the carpet area in the MIG I category of CLSS from the existing 90 square metre to “up to 120 square metre” and increasing the carpet area in respect of MIG II category of CLSS from the existing 110 square metre to “up to 150 square metre”.
The increased carpet area will also give a boost to the sale of ready built flats in the affordable housing segment.
Affordable housing is housing which is deemed affordable to those with a median household income as rated by the national government or a local government by a recognized housing affordability index.
Various developers such as Ruparel Realty, Paradigm Realty shared their views on the same.
Amit Ruparel, Managing Director, Ruparel Realty, said,”We welcome the government’s move in increasing the carpet area for houses in the MIG-I & MIG II category as it will help meet the needs of the middle class society in smaller towns and cities. It will also create a demand for the affordable housing sector and help builders’ clear unsold stock thereby boosting the real estate sector in coming years.”
Rajeev Talwar, Chairman and Niranjan Hiranandani, President, NAREDCO congratulated Prime Minister and the Central Govt. for above landmark decisions, which will help in meeting the aspiration of millions of MIG home buyers. They felt that this decision of Govt., beside helping in clearing unsold stock, will also encourage developers to launch new projects and boost economy, GDP growth and employment. This decision will now bring the entire demand for affordable housing under the interest Subvention Scheme, accounting for almost 96% of the total demand for housing in the country.
Ashish R. Purvankara, President CREDAI, Bangalore & M.D. Puravankara Ltd. says, “This will propagate government’s vision ‘Housing for all’ across the country, including for Bengaluru. Bengaluru today contributes almost 60% of the overall units in the residential market for South. The move comes with multiple benefits for both builders and home buyers. The builders in the city will now be able to sell the unsold inventory and it will have a positive impact on both premium and affordable housing segment as the new carpet areas will encompass both. This will overall impact GDP, boost economy and employment in the sector. For the common man, his or her dream of owning a home will become a reality from an affordability and accessibility point of view. They will enjoy the benefits of interest subsidy, securing home loans will be easier and processes will be further simplified.”
“The government decision to enhance the classification of affordable housing by extending the carpet area to a maximum of up to 150 metres (over 1600 square feet) translates into ticket size of Rs 40-100 lakhs. This is set to act as a catalyst for the fragile real estate sector by reviving demand. The increase in threshold limit will enable the middle income group buyers to avail interest rate subvention under Credit Linked Subsidy Scheme (CLSS), but would dilute the impact for the lower strata of the society with lower ticket size. We believe subsidies may be more effective, if restricted to EWS/LIG segment in the interest of inclusive goal of housing for all,” said Rajesh Krishnan, founder and CEO, Brick Eagle.