Realty sector welcomes eco package, says CLSS extension will boost demand for affordable housing

The extension of the Credit Linked Subsidy Scheme (CLSS) for middle-income group till March 2021 will boost demand for affordable housing, while rental housing policy for migrant labour/urban poor will open new business opportunities for builders, according to property developers and consultants.

The Centre on Thursday announced the launch of a new scheme to provide homes to migrant labour/urban poor at an affordable rent, and extended the interest subsidy scheme CLSS for the middle-income group till March 2021 to boost housing demand.

Under CLSS, a home buyer can avail interest subsidy of up to Rs 2.7 lakh on home loan.

"The extension of CLSS up to March 2021 and infusion of Rs 70, 000 crore is an action-oriented reform for the revival of affordable housing segment," CREDAI said in a statement.

The industry body hoped that the real estate sector will get third set of stimulus, which will help boost liquidity, reduce input cost and restore supply of raw material to start construction of projects. It also sought tax sops for homebuyers to boost demand.

"The extension of CLSS should see demand for another 2.5 lakh affordable homes, which should create demand for construction material as also provide jobs. The rental housing scheme under PMAY offers a business opportunity to the private sector, to build more rental housing stock through the PPP mode, with a concessionaire arrangement," Naredco President Niranjan Hiranandani said.

Anarock Chairman Anuj Puri said this will help push demand for affordable housing.

Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa at CBRE, said: "The announcement on rural infrastructure and affordable rental accommodations for urban and migrant workers under PPP partnership will open newer avenues for the construction industry."

On extension of the CLSS scheme, he said this is a positive step and will further strengthen demand in the affordable housing segment.

Dhruv Agarwala, Group CEO, Housing.com, and PropTiger.com said: "The extension of CLSS by one year will prompt many of the fence sitters to buy homes at the earliest and thereby increase demand for affordable housing wherein industry has max unsold inventory across the country."

Knight Frank India CMD Shishir Baijal said :“Today's announcement has reemphasized on government's agenda of promoting 'Affordable Housing' and 'Housing for All'. The extension of CLSS for another year will help demand for the affordable housing sector to inch back as and when the economy starts to revive."

However, for demand for housing to return, irrespective of the category, the economy must start growing at a stable rate providing individuals financial security, Baijal added.

JLL India CEO and Country Head Ramesh Nair said: "The extension of this CLSS scheme coupled with attractive mortgage rates will improve consumer sentiments and boost demand for affordable and mid segment housing."

Shriram Properties CMD Murali said this move is a breather for the affordable housing sector as it will enhance the sale of affordable housing properties with home buyers continuing to get home loans from banks and housing finance companies at a subsidised interest rate.

Signature Global Chairman Pradeep Aggarwal said: "In the last couple of years, the subsidy of up to Rs 2.67 lakh under CLSS has been one of the biggest catalysts for home buyers, particularly for affordable housing in tier II & III cities."

With property prices remaining stable, the extension will prompt more people particularly to buy homes, he said.

Bhairav Dalal, Partner and Leader Real Estate Tax, PwC India, said: “Affordable rental housing under PPP model sounds great as a concept. The execution and implementation of road map will be a key to its success."

Gaurav Karnik, National Leader - Real Estate, EY India said, government's proposal for introducing PPP scheme for providing rental housing for urban poor is bold and innovative measure and shall help in meeting the objective of Housing for ALL by 2022.

Sanjay shukla, MD & CEO, Centrum Housing Finance, said: "The extension of the CLSS,along with the expectation of a correction in real estate prices and reduction in interest rates, will provide an impetus to the sector."

Omaxe CEO Mohit Goel said the extension of CLSS along with extended project completion timeline will help in addressing both demand and supply side issues, hence, augurs well for the sector.

The CLSS will bring in cash flows for the sector and boost affordable housing segment, said Ashok Mohanani, the Chairman of Mumbai-based Ekta World.

Ashish Bhutani, MD & CEO, Bhutani Infra, welcomed the decisions but demanded one time restructuring of loan for the industry.

Uddhav Poddar, MD, Bhumika Group said the extension of CLSS will definitely benefit the affordable housing segment, which is a key demand driver within the real estate sector.

"While the government's expectation of 2.5 lakh families enrolling for the scheme within a year, seems slightly ambitious, the extension by a year was much required and is bound to safeguard against possible demand disruption after the lockdown," said Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory.