‘Housing For All’ Scheme Targets Young Earners 

Young adults from low-income urban families can get loans at lower rates to buy own homes as the government has expanded the ‘Housing For All by 2022’ scheme, a move that may boost demand for affordable houses.

A young earning member, married or single, can be treated as a separate household provided he or she does not own a pucca house, according to amendments to the Pradhan Mantri Awas Yojana approved by the Ministry of Housing and Urban Poverty Alleviation. Earlier, the scheme allowed interest benefits for only one house per family comprising a couple and unmarried children.

The change will allow more families to get the benefit of credit-linked subsidy and can boost construction of affordable homes, said Pankaj Bajaj, managing director at Delhi-based developer Eldeco Infrastructure & Properties Ltd. It can increase the size of the market manifold, he said.

Millennials aspiring to buy homes stand to gain. Nearly a quarter of those under 35 years live with parents and will move out to a new house in the next two to five years, according to a 2016 report by real estate services provider CBRE India. Sixty-five percent of the millennials in India want to buy property without compromising on the quality of life, the report said.

Nuclear families, urban growth and affordability will boost demand, India Ratings said in a June report. The low-cost housing category could grow four-fold into a Rs 6-lakh-crore opportunity by 2022, Harshal Patkar, senior analyst with India Ratings, had told BloombergQuint.

‘Brings Clarity’

The amendments have also changed the definition of carpet area to match with that in the Real Estate Regulation Act, the law that makes builders accountable for what they promise homebuyers and brings all stakeholders under its ambit. Carpet area includes usable spaces.

It is good that this clarification has been issued at an early stage of PMAY, otherwise conflicts in definition always cause disputes later, said Bajaj.

The scheme was initially meant to cover people with income of up to Rs 6 lakh crore and has now been widened to include those earning thrice as much. The guidelines have included houses in new areas notified by urban development authorities. Which means, people outside the limits of urban bodies could also get the benefits.

The ministry has provided much-needed clarity on what kind of housing qualifies for the benefits under the scheme and who the target beneficiaries are, said Anuj Puri, chairman at Anarock Property Consultants. “This is important to ensure that there is no misuse, misinterpretation or confusion either by sellers or buyers of affordable housing.”