India’s housing finance penetration level remains stable
Over the past five years, housing finance penetration has remained stable in India, reports ICRA Limited, an Indian credit ratings agency. The penetration levels in other developing countries are significantly higher than in India. The report states that the penetration rate increased from 4.5 percent as on March 2004 to 7 percent in March 2007. But since then the level has stayed almost stagnant, which indicates towards significant scope for further growth in future. High property prices, sliding affordability and tough operating environment are the major challenges faced by housing finance growth. Factors such as increasing property rates and interest rates, lower income levels and high inflation leading to decrease in net disposable income of the borrowers, have all resulted in reduced affordability of home buyers, points out ICRA. The report includes that, as on March 31, 2012, the total housing credit in the nation was over Rs 6261 billion while it was Rs 5345 billion as on March 31, 2011, which records a growth of 17%. And the home loan market has witnessed about 10 percent growth in 2011-2012. Despite the challenges continue to obstruct the growth of home sales, the expected reduction in home loan rates, attractive schemes offered by banks and higher ticket sizes, due to higher property prices, are estimated to support a 17-19% growth of the Indian mortgage market in 2012-13. For more news: CREDAI members plan on clearing unsold houses Bangalore ranks first in India in quality of living
Affordability, developing countries, High property prices, home loan, Home sales, Housing finance, ICRA Limited, income levels, India, Indian mortgage market, Inflation, net disposable income
[...] India’s housing finance penetration level remains stable [...]