Scaling Up Retail Housing

With the festive season in full swing, Vinay Sah, MD & CEO of LIC Housing Finance tells Narayan Krishnamurthy, about the developments augmenting growth in the housing sector

- Narayan Krishnamurthy

Interest rates are low. But the uptick on home loans is not visible. What trends are you witnessing?

Home loans are growing around 15 to 17 per cent and hence it would not be entirely correct to say that uptick on home loans is not visible. The sector has seen two major reforms— RERA and GST. With RERA kicking in from 1st May 2017, builders are busy implementing their ongoing projects to the RERA regime. New launches have to be registered under RERA before any marketing activity by developers. Hence, in many parts of the country we could see a dip in launch of new projects. Second factor is the implementation of GST and clarity on the rate applicable to under construction units.

Perhaps there were expectations of cost rationalisation for new units post GST which put prospective buyers in wait and watch mode. It is natural that new changes will bring its own challenges. Things are settling down fast as we see the number of projects getting registered under RERA. Confidence is slowly coming back. Typically, good deal of purchases, including homes for Indians, start from the festival season which has just commenced.

The government is continuing its drive on affordable housing and supports the first time buyers with credit linked subsidy scheme. The Employee Provident Fund (EPF) now can be withdrawn for purposes of down payment and EMIs of home loans. Interest rates are attractive. These are the positives needed to lift the sentiments of people. In my opinion, all of these vibes augur well for the end user segment and we can find sustained growth in the industry for the next few years.

With the festive season round the corner, do you see an update in home loans?