The promotion of affordable housing for middle and lower-income groups in urban areas has been done extensively by the central government. Affordable housing is a novel concept allowing homebuyers to own a house at a median price range when property dearness has become a common trend. Affordable housing finance is a boon for millions of homebuyers who wish to buy a house but need more material resources to invest in projects.
The economic headwinds like unemployment, layoffs, and recessionary fears are tail-spinning. But homebuyers can only prolong their residential purchases for a short time, said Rajesh K Saraf, MD, Axiom Landbase.
“This is where Affordable Housing Finance plays a remedial role in incentivising homebuyers with monetary help to finalise home purchases,” Saraf said
It is actually helping to sustain affordable housing demand, which has witnessed a tamped-down demand in supply as well as launches, added Saraf.
However, its demand has witnessed a nosedive due to the growing home price listings. As per Ashwani Kumar, Pyramid Infratech, affordable housing finance is helping low-income sections and economically disadvantaged groups with financial resources to buy and build homes and help them to afford a roof over their heads.
In a way, it is also contributing to the revival of affordable housing markets, bringing its traditional buyers to the investment zones and leading to a perception shift in favour of affordable and mid-housing segments, said Kumar.
Financial authorities will also be involved in an effort to improve access to credit and reduce the price of intermediation
According to Siddharth Maurya, Resource Specialist, Expertise Real-Estate and Fund Management, large banks that lend to HFCs can benefit from a significant spread on their loans without having to deal with the unique challenges of handling this specialised customer segment across several locations.
“Finally, rather than undertaking the research themselves, banks may be able to meet their Priority Sector Lending (PSL) criteria by getting affordable housing loans from well-managed HFCs. Due to this, banks may allocate their capital and produce a fair profit without significantly increasing customer risk or confronting operational challenges,” said Siddharth Maurya.
All this has made a significant impact on reviving the affordable housing finance environment, added Maurya.