Affordable Housing

- Yogesh Supekar

The Indian housing finance sector is one of the fastest growing sectors in India and comprises of banks and housing finance companies.

The recent steps taken by the government in the Centre and also various state governments, have been pushing the real estate players towards much positivism from earlier negativism. Suddenly, there is a sense of euphoria among the builders since the time government agencies started believing and talking about the affordable housing seriously. Net results-- benefit for both the small, medium real estate players and also the HFCs.

Efficient mortgage lending is a strong driver acting as a growth catalyst for both housing demand and construction of houses in India.

Housing Finance Companies (HFCs) have witnessed an increase in total outstanding loans with a CAGR of 26 percent between financial years 2009-2010 and 2014-2015. During the same period, the growth in total loans outstanding in the industry (i.e. banks and HFCs) was 19-20 percent.

Indian housing sector remains relatively under-penetrated compared not only to other advanced economies but also to its emerging market peers. The mortgage-to-GDP ratio stood at 9 percent for India as on March 2015. This compares awfully with the ratios for countries like Denmark where the mortgage-to-GDP ratio is almost 100 percent. This ratio for the US and the UK stand at around 80 percent.