Real Estate

Realtors seek interest rate cut, EMI waiver boosting buyer sentiment

Our Bureau Mumbai | Updated on June 29, 2020 Published on June 29, 2020

The sluggish demand has crippled the industry for close to two years now, while the Covid-19 triggered lockdowns have further worsened the crisis.   -  Nagara Gopal@thehindu

The real estate developer community has appealed to the government to help reduce the home loan interest rate to 5 per cent and raise the limit for affordable housing prices to ₹75 lakh.

The government should also waive equated monthly instalments (EMIs) for 24 months and reduce ready reckoner rates to make the stamp duty affordable, according to an online petition to Prime Minister filed by the Credai Action Committee.

The online petition, which is live now and has already raised nearly 38,000 signatures, has also sought the Finance Minister and RBI’s immediate attention to the industry’s issues. These measures would help in reviving consumer sentiment in the real estate sector, said Ajay Ashar, spokesperson for the committee, adding that raising the affordable housing prices limits would help the sector avail 1 per cent GST.

At present, the home loan interest rate is about 8 per cent, while the affordable housing prices are limited at ₹45 lakh.

The Indian economy is consumption-driven and resumption of purchase of houses will rekindle the real estate sector, which, in turn, will reboot about 300 industries and lead to the generation of more than 5 crore jobs across the country, Ashar said.

ALSO READ: Finance Minister to study realtors’ debt woes with fresh, open mind: Credai

“Homebuyers actually hold the key for the revival of real estate which will, in turn, boost the economy,” said Rajesh Prajapati, founder president of Credai MCHI Raigad unit.

Growing crisis

The sluggish demand has crippled the industry for close to two years now, while the Covid-19 triggered lockdowns have further worsened the crisis.

Earlier, stressing that the homebuyers’ interests will be protected in view of the delays in completion of projects arising out of the lockdowns, the Prime Minister’s Office (PMO) has assured city-based NGO Samachar Foundation that the issues faced by the developer community will also be looked into.

ALSO READ: PMO to look into realty crisis, protect buyers’ interest

The Credai Action Committee has also suggested an increase in limit of principal deduction on housing loan under Section 80C to ₹2.5 lakh, raise interest deduction under Section 24 on housing loan for homebuyers to ₹10 lakh and scrapping of the capital gains tax for residential properties held for a period of longer than one year to allow them time to reinvest after serious thought.

Pointing out that the ready reckoner or circle rates are unrealistic and even more than the prevailing market prices, the committee called for rationalisation of these rates. Ready reckoner or circle rates are fixed by various State governments to form a basis for levying stamp duty and the reduction will benefit the governments due to the high volumes the consumption will generate.

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Published on June 29, 2020
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