Demand for affordable houses set to explode in 5 years
A study by India Ratings projects that home loans in the low-cost segment will become a Rs 6 lakh crore opportunity for HFCs
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Last Updated: Jul 27, 2017, 06:17 IST1 min
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According to a recent report published by India Ratings and Research (Ind-Ra), demand for affordable housing will increase to 25 million homes in the next five years, opening up a market opportunity valued at Rs 6 lakh crore for housing finance companies (HFCs).
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The projected increase in demand to 25 million homes in the lower- and middle-income groups is four times the entire housing stock financed currently. The report cites factors such as financial and policy thrusts by the government, rising urbanisation and increasing nuclearisation of families as reasons for the growth.
Ind-Ra also projects a Rs 20,000 crore equity inflow between FY17 and FY22 into the segment.
Many firms in the housing finance market have caught wind of this trend towards affordability and have started to capitalise on it. New firms such as Centrum Housing Finance Ltd and Capri Global Housing Finance Limited, a subsidiary of Capri Global Capital Ltd, too, have already started providing small loans to home-seeking customers in cities throughout India.
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The Ind-Ra report warns that these entrants must be strategic in order to compete with entrenched incumbents. “HFCs which can better blend modern technology with on-ground infrastructure and presence will have an upper hand in the market,” says Anand Bhoumik, MD and chief analytical officer, Ind-Ra.
First Published: Jul 27, 2017, 06:17
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