What’s CREDAI’s vision for the project?
This is in line with the Government’s mission of Housing for All. We aim to provide affordable housing across the nation, specifically aimed to boost the inventory in this segment so as to mobilise potential home owners and enable them to leverage the incentives provided by the Government.
We aim to complete our initial commitment of projects in the next 2-3 years.
The implementation strategy?
CREDAI has 11,800 members across India and they have committed to expanding the projects in every state. Eventually, more developers will foray into the segment and even public–private partnership models will be implemented and the build-sell model will gain momentum. All projects under this initiative must have all the pre requisite permissions or should be in the process of obtaining them.
A s of now, the projects are good to go and work will begin on them and has already begun on a few, depending on the clearances obtained and the RERA mechanism in place.
Will all homes be in the affordable segment?
These are all are private developments which are open to all buyers in a first-come-first-serve basis. Our aim is to boost the inventory in the affordable segment to cater to LIG and MIG consumers, but these homes will be across all viable categories. With over 300 projects, there will be a wide variety of options available to buyers.
What’s the State-wise allocation?
In the initial announcement, Maharashtra and Gujarat lead with 108 and 147 projects respectively. This will result in 79,140 affordable housing units in Maharashtra and 51,593 units in Gujarat. Tamil Nadu has announced five projects which will create 843 housing units.
As this was the initial announcement, we expect the numbers to go up, now that we have signed an MoU with SBI. This will provide cheaper and faster construction finance to member developers and also make it cheaper for consumers to avail home loans.
Benefits to the State’s housing market?
SBI is our partner for the five affordable housing projects and has provided a concession of 35 basis points. As soon as the RERA mechanism comes into place, projects in the process of obtaining approvals will move towards registration and ensuring compliance.
Once the financial viability of such projects become visible to the market, demand will increase and improve the present scenario in the State.
Impact of RERA and GST?
With respect to RERA, only once a mechanism comes into place will it be possible to understand the compliance burden and how it will impact project costs. We have tried to minimise this impact by selecting projects which have or are in the process of obtaining the requisite permissions.
As of now, real estate has been excluded from the ambit of GST. Yet, our raw materials and logistics costs will include the same. Once trade starts including GST, we will be able to begin estimation of the change in costs and how it will reflect in our prices.
