GST – FindMyProperty

The Reserve Bank of India made a decision to increase the limits on loans for PSL (Priority sector lending) which may assist in the first-time homebuyers get greater amounts of loans at better terms which in turn may boost the sales of Affordable Houses.

RBI revised the housing loan limit for PSL from Rs 28 lakh to Rs 35 lakh in cities with a minimum population of 10 lakh and from Rs 20 lakh to Rs 25 lakh in other cities. This is on condition that the overall cost of the house does not exceed Rs 45 lakh for metropolitan cities and Rs 30 lakh for other cities.

The RBI has also raised concerns over rising minor crimes and suggests at lesser loan to value of the property.

Reduced home loan interest rates and necessary impetus by the government has helped to boost sales of the affordable housing sector. The housing sector has been supported by the government through lower GST rates, affordable housing fund, increased duration of loans CLSS of Pradhan Mantri Awas Yojana (PMAY) and extended income tax benefits to apartments of maximum carpet area of 645 sq ft.

According to Khushru Jijina, MD of Piramal Finance & Piramal Housing Finance the decision would up the sales of affordable houses which will in turn help in economic growth.

The rating agency CRISIL is of the view that the decision will allow most of the housing loans given by banks to qualify for PSL which would be positive for the banks. CRISIL also added that as of April 2018, 37% of the housing loans given by the banks qualified for the PSL.

The repressed interest for housing is presently getting converted into real sales. While industry specialists have been naming the situation as buyers’ market for quite a while, homebuyers themselves appear to have turned out to be more active at this point.

Things are looking positive as indicated by the performance some of the listed real estate companies with regards to residential sales over the last one year.

A key role in this resurgence is played by lower interest in home loans and government’s encouragements on affordable housing. The government, to support affordable housing fund, has introduced a number of schemes such as Pradhan Mantri Awas Yojana (PMAY), Lower Goods and Services Tax (GST) and extended income tax benefits to apartments of carpet area of 645 sq ft.

HDFC Bank has recently reported a 26% increase in individual loans in FY18. Godrej Properties reported a 152% on-year increase (at Rs. 5,083 crores) in the value of bookings for FY18. The organization’s most noteworthy ever sales in any budgetary year was led by booking volume of 6.26 million sq ft.

Amid the final quarter alone, the organization’s booking value saw 210% on-year development at Rs 1,054 crore. The executive chairman of Godrej Properties, Mr Pirojsha Godrej said, “For the first time in its history, GPL has delivered sales of more than Rs 1,000 crore for four consecutive quarters. We look forward to building on this momentum in FY19”.

The final quarter and the full financial year swung out to the best-ever in value terms for Bengaluru-headquartered Sobha, with an increase across regions and product categories. It has recorded new sales volume of 3.63 million sq ft, evaluated at around Rs 2,861 crore amid the year with yearly sales volume and values increased 21% and 42%, respectively. The performance of Kochi and Gurugram also saw an improvement.

Indiabulls Real Estate, a Mumbai-headquartered real estate developer saw a 20% growth in both 600 apartments and sales value at Rs 3000 crore. Strangely, the premium segment also contributed to the organization’s performance during the year.