by Suman Gupta
The festive season, traditionally the time for the fence-sitters to make their home purchases, has arrived, and real estate developers, marred by severe financial crunch and muted buyer sentiment, are pinning their hopes on it to turn their fortunes. While special freebies and offers are a normal during this time of the year, the boost by the government to push housing demand has added fuel to the fire on the role of this festive season in improving sales.
Here’s how this festive season can prove to be different and effective from the previous ones:
The real estate sector, being the second largest job creator after agriculture, plays a major role in economic growth. Given its linkages with other industries, the current sluggish scenario in housing segment has emerged as a major concern not only for builders, home buyers or its suppliers but also for the government.
Thus, the government, in the past few months, has come out with various measures to boost housing sales:
a) Stressed fund: The government has announced a special window to provide last mile financing, through a Rs 20,000-crore fund, for affordable and middle-income housing projects, which, according to its own estimates, will benefit around 3.5 lakh housing units.
b) Sops for government employees: In some good news for Central government employees during the festive season, the government has reduced the interest rate on house building advance (HBA) for all central government employees to 7.9% from October 1, 2019 for a period of one year.
c) Ease of raising fund via ECB: The government has eased the norms for raising funds through External Commercial Borrowing (ECB) to facilitate financing home buyers who are eligible under the Pradhan Mantri Awas Yojana (PMAY), which will help in relaxing the liquidity stress.