Housing for lower income people

Now even the lower income group people will be able to have a home of their own.Soaring home rates are making economical housing all the more difficult for the common man with meager income. DBS has announced construction of 5000 affordable homes in the surrounding region of Ahmedabad. The prices are expected to fall in the range 3.5 lakh to 8.5 lakh.

DBS plans to make use of Hybrid Value Chain (HVC) model developed by the Ahoka Innovators, to construct the units. The developer has already launched 2400 units and will soon come up with the remaining ones.

The Vice President of DBS Affordable Home Strategy Mr. Sudarshan Iyengar said “ Although this group is in apposition to repay home loan EMIs they find it difficult to qualify for the formal sector loans for want of Income Proof, address proof and financial track record.”

Vice President at Ashoka Mr. Valeria Budinich said, “ new Alliances to design, build, finance market and scale up affordable housing throughout India are now in place. Over the next four years, Housing for All, an initiative of Ashoka, will start new projects based on this model in many states across the country.”

Budget gives a reason of joy to home loan borrowers

To rein rising inflation the Reserve Bank of India has hiked the interest rates seven times since March 2010 and as a result a direct impact was seen on the demand for the home loans.

However the budget for the year 2011-12 brought a lot of relief for the customers in its own ways. During the budget the Finance Minister proposed to raise the limit on eligibility for subsidy on the interest rates for home loans and also widened the scope for housing under “priority-sector lending" for banks.

Chairman of Jones Lang LaSalle India Mr. Anuj Puri said "Raising the priority home loan limit is good news for the low income group segment, but will do nothing to ease the pain in the metropolitan cities where prices and demand for affordable housing is highest."

Finance Minister has proposed to raise the limit for a subsidy of 1 percent on interest rates on housing loans form Rs. 10 lakh to Rs. 15 lakh and for home-valued form Rs 20 lakhs to Rs 25 lakhs.

The Vice Chairman and Managing Director of Knight Frank India Mr. Pranab Datta said "During the last one year the prices of residential real estate has increased by 10-20 percent across several cities. This enhanced limit for interest subvention will ensure continued benefit to the buyers of this particular segment."

HDFC Ltd. makes home loans dearer

Housing Development Finance Corporation (HDFC) Ltd. has hiked the home loan rates by 25 basis points or 0.25 percent.

Earlier the bank hiked the rates offered by it on 25^th February by 25 basis points. Since April 2010, the bank has hiked the interest rate by 175 basis points. In accordance to the revised interest rates the bank will now charge 10% interest rate for borrowings between 30 to 75 lakh and 10.25% for loans above 75 lakh.

SBI, the biggest competitor of HDFC also charges same rates, ICICI Bank another leading lender charges slightly higher then both the banks.

Te officials from HDFC Bank said "This is in line with the interest in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market."

The revised rates will be effective from 1^st March.