Buoyed by the recent budgetary proposals and RBI notification on affordable housing, realtors across the country have lined up a staggering investment worth Rs. 5,000cr for building budget housing projects. Leading the pack is Bangalore-based Puravankara's Provident Housing, which has decided to invest Rs 2,500cr to develop five projects, with a total space of at least 10 million sq ft across Bangalore and Hyderabad. Provident's projects will have a total of 8,000 units as against the 6,276 units it had sold from its inception till March this year. Others include Tata Housing's Tata Value Homes, Jerry Rao's Value and Budget Housing and Mahindra Lifespace Developers among others, said sources, adding that Tata Housing plans to launch three to five projects, with about 1,000 units, involving an investment of Rs 500cr in the next few months whereas Jerry Rao's VBHC has planned more launches this year in the Mumbai metropolitan region, Chennai, National Capital Region and Bangalore.
VBHC already has projects in these cities and is keen to further deepen its focus in these areas, chief operating officer, Rahul Sabharwal, said. Mahindra Lifespaces has already announced that it is launching two affordable housing projects this year, one in Bhoisar near Mumbai and another at Avadi, close to Chennai, in the next two months. Between the two, the projects would have about 2,000 apartments and based on public response they would launch more such projects in other cities. In the Union Budget, the finance minister allocated Rs 4,000cr to National Housing Bank, for increasing the flow of cheaper credit for affordable housing to the poorer sections and other low income groups. First-time home buyers' tax break for a self-occupied home has been raised from Rs 1.5 lakh to Rs 2 lakh and the personal tax limit is also being raised from Rs 2 lakh to Rs 2.5 lakh. That apart, RBI recently brought housing loans up to Rs 50 lakh under priority sector lending, which meant cheaper rates now. The move will fuel demand for affordable housing projects as home buyers who were borrowing up to Rs 50 lakh were paying 10-11% and thanks to the new norms, they can expect a 25-50 basis points reduction in home loan rates in the medium term.