Pradhan Mantri Awas Yojana Stimulating the Growth of Real Estate in Kerala
Housing for all by 2022 is the mission behind Pradhan Mantri Awas Yojana (PMAY)! Recent statistics suggest that PMAY, launched by the Union Ministry of Housing and Urban Affairs in June 2015 to provide affordable and concrete houses for the urban poor has been instrumental in changing the dynamics of the real estate in Kerala.
PMAY – Overview:
India government has identified 305 cities and towns in nine states to initiate construction of affordable houses for the urban poor by 2022 with a financial assistance of Rs two trillion. This move on affordable housing has changed the dynamics in the industry and led to the rationalisation of prices, and reduction in unit sizes in the real estate in Kerala. Housing finance transactions in low-ticket sizes are reported with many HFCs funding affordable housing projects.
Home-buyers benefit from PMAY
An applicant from the MIG category with an annual income of above Rs 6 lakh and up to Rs 12 lakh gets an interest subsidy of 4% on a 20-year loan component of Rs 9 lakh. Those with annual income exceeding Rs 12 lakh and up to Rs 18 lakh would get interest subsidy of three per cent;
For those in the EWS and LIG category who wish to take a loan of up to Rs 6 lakh, there is an interest subsidy of 6.5% for a tenure of 15 years. The interest subsidy on loans up to Rs 12 lakh will be 3%.
Pradhan Mantri Awas Yojana (Urban) is applicable for the following sections –
- Economically Weaker Section/Lower Income Group (EWS/LIG)
- Middle Income Group I & II
- The Credit Linked Subsidy Scheme (CLSS) of Pradhan Mantri Awas Yojana has an interest subsidy up to Rs 2.67 lac on your home loans.
The essential requirements of earnings to be eligible for applying for the Pradhan Mantri Awas Yojana and avail subsidized rates of housing interest are:
- Middle Income Group I- Rs 6,000,01 – 1200000/annum
- Middle Income Group II – less than 1200001 – 18,000,00
- Low Income Group – Rs. 3,000,01-600000 Lakhs per annum
- Economically Weaker Section- up to Rs. 3 Lakhs per annum
Women citizens of India are also eligible for this scheme. Aadhar card is mandatory for applying & the location of the property should fall under 4315 towns and as per the list (updated by the government from time to time). Apart from these basic criteria, there are several other checks before an individual can be eligible to apply for the PMAY Yojana Scheme.
PMAY and affordable housing
With the implementation of PMAY the affordable housing sector is in for a dynamic change & first-time home-buyers will have more advantage. Premium luxury has become more affordable & many private realtors are also foraying into real estate in Kerala with affordable housing because of the public-private partnership (PPP) model. Flat sizes are fast shrinking in metros & many HFCs are coming up in low-ticket size loans.