Housing companies are in focus due to the government's renewed thrust on housing for all with interest subvention on the affordable housing sector.
Sudhin Choksey, MD, Gruh Finance in an interview to CNBC-TV18 spoke in detail about the benefits and drawbacks of the various credit linked subsidy scheme provided for low-income group, MIG-I and MIG- II. He also spoke about the implementation of Real Estate (Regulation and Development) Act which will come into effect from April 1.
The time taken for implementation of RERA Act by various states will be different. So it could well be 6-9 months before it starts functioning properly, says Choksey.
The company has a dominant presence in Gujarat, Maharashtra and Madhya Pradesh and talking about demand in these cities, Choksey says the inventory buildup in both Gujarat and Maharashtra are quite high over the last 3-4 years and so demand has been weak compared to other states.
However, in Madhya Pradesh the inventory being less, the demand situation may be better.
The newly launched CLSS for MIG covers two income segments in the MIG viz. Rs.6,00,001 to Rs.12,00,000 (MIG-I) and Rs.12,00,001 to Rs.18,00,000 (MIG-II) per annum. In the MIG-I, an interest subsidy of 4% has been provided for loan amounts up to Rs.9 lakh while in MIG-II, an interest subsidy of 3% has been provided for loan amount of Rs.12 lakh. The interest subsidy will be calculated at 9% NPV over a maximum loan tenure of 20 years or the actual tenure, whichever is lesser. Housing loans above Rs. 9 lakh and Rs. 12 lakh will be at non-subsidized rates.
Choksey is hopeful that the scheme will get an extension beyond one year.
For full interview, watch video