.............47 Re­search Notes - Hous­ing

Banking Frontiers - - Highlights -

In­dia Rat­ings and Re­search (Ind-Ra) be­lieves af­ford­able hous­ing fi­nance (largely for loan ticket size up to `1.5 mil­lion) will be­come a large seg­ment for hous­ing fi­nance com­pa­nies (HFCs) over FY18-FY22, with the es­ti­mated share to in­crease to around 37% in FY22 (FY17: 26%).

Ind-Ra an­tic­i­pates a de­mand for 25 mil­lion homes (4x of the en­tire cur­rent hous­ing fi­nance stock) over FY17-FY22 in the Medium In­come Group (MIG) and Lower In­come Group (LIG) cat­e­gories. It ex­pects the sec­tor to at­tract over `200 bil­lion of eq­uity in­flows over FY17-FY22 which would sup­port growth.

A com­bi­na­tion of fac­tors such as gov­ern­ment fi­nan­cial and pol­icy thrust, reg­u­la­tory sup­port, ris­ing ur­ban­iza­tion, in­creas­ing nu­cle­ariza­tion of fam­i­lies and in­creas­ing af­ford­abil­ity is con­vert­ing la­tent de­mand into a com­mer­cially lu­cra­tive busi­ness op­por­tu­nity, ac­cord­ing to spe­cial re­port au­thored by Ind-Ra’s an­a­lysts led by Har­shal Patkar. The to­tal as­sets un­der man­age­ment in the af­ford­able hous­ing seg­ment at present is ap­prox­i­mately `1.5 tril­lion and it is likely to be up four times to `6 tril­lion by FY22.

The in­ter­est sub­sidy could be as much as one-fourth of the to­tal fund­ing for a typ­i­cal ticket size, thereby in­creas­ing the af­ford­abil­ity for the bor­rower and low­er­ing the ef­fec­tive in­ter­est rate. A large size of the in­cre­men­tal cus­tomer sets could be in­tro­duced to for­mal credit for the first time. The Jan Dhan-Aad­haar-mo­bile trin­ity could be an en­abler in this step.

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