Union government gives big home loan boost to housing in India

The Union government on November 17, 2017 made loans cheaper even for slightly bigger homes bought by middle-income groups in a move that should boost demand and help kick-start the real estate sector.

The Union Cabinet approved a proposal that will allow those with an annual income of up to Rs 12 lakh to buy or build a house of up to 1,200 sq ft; earlier the area was capped at 900 sq ft. Those with an annual income of up to Rs 18 lakh are now eligible for loans at a softer rate to buy or build a home covering 1,500 sq ft; this was 1,100 sq ft earlier.

Purchases in the secondary market are also covered by the scheme. Earlier this year, the government had allowed buyers with annual incomes of between Rs 6 lakh and Rs 18 lakh to borrow at concessional interest rates. Approximately 3.5 lakh homes of the registered 6.7 lakh apartments in Mumbai Metropolitan Region have not found buyers so far, according to data on the MahaRERA website.