Hike in priority sector lending makes affordable housing more accessible



The housing loan limit for priority sector lending has been revised from INR 28 lakhs to INR 35 lakhs in metros and from 20 lakhs to 25 lakhs in other centres, by the RBI, provided that the dwelling unit does not exceed INR 45 lakhs. This hike in the priority sector slabs would allow first-time homebuyers avail higher loans which would probably boost sales in the truly affordable housing projects.

With the subsidy of INR 2.68 lakh through PMAY along with this revision, owning a house in metros will make owning a house in the metros a reality for many, especially for the economically weaker sections and lower income groups. However, a dwelling worth INR 45 lakh is not more than a studio and rarely available in the city limits.

Through PMAY, the central government has set a target of constructing 50 million houses by 2022 of which 30 million would be constructed in the rural areas. The priority lending tag will reduce equated monthly instalments on loans and will ensure easier access to credit to these planned constructions.

The government has supported the affordable housing sector by lower GST rates, increased tenures of loans with credit-linked subsidies and extended IT benefits to apartments up to 645 sft. carpet areas.

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