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Government’s schemes could propel housing loans in middle segment

The banking sector is expecting the Union Government’s announced subsidy of Rs 6,083 cr under various urban housing schemes for the year 2017-18 to propel houses in the Rs 30 lakh to Rs 75 lakh sector. “If the subsidy is for Rs 6,000 cr, constructions in these sectors could be for Rs 1 lakh crore,” a senior SBI official said.

Government’s schemes could propel housing loans in middle segment
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The official said this at the two-day housing and car loan mela organized by SBI in Coimbatore this weekend. Another official added that Tamil Nadu will be among the biggest beneficiaries of the scheme. “Of the 4,041 towns identified for the projects under Pradhan Mantri Awas Yojana (affordable urban housing for all) 725 are in Tamil Nadu and Puducherry,” he added.

Stating that there is a vibrant builder community in the State, they added that they are awaiting details of the schemes to arrive at a business volume. Senior officials in the bank’s real estate sector said that demonetisation affected disbursal of housing loans sizably in November and December. “Disbursal of loans in the middle and lower middle sectors are back to normal. These sectors who usually go for houses in the range of Rs 30 lakh to 75 lakh account for an 80 per cent share in housing loans. Now business is as usual in these sectors,” he added.

However, he said that disbursal of housing loans for the high end segment who went for houses priced at more than Rs 1 cr is yet to recover. “These customers belonging to the business and industry are waiting for investing as they are not sure on managing their show if they invest cash in housing,” an official said. On the other hand, officials said that people in the middle segment are waiting to invest in a house as there is a misconception that there could be a big price correction in housing loan. Officials hinted that this may not be likely in the near future.

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