Growth of Housing Finance in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

In order to provide housing for all by 2022, the government needs to develop the housing finance sector. In its current avatar, the housing finance sector is able to provide loans to borrowers working in the formal sector with proof of income and banking transactions. However, about 99% of the total shortage of housing in urban areas belongs to the Economic Weaker Section and Low Income Groups of the society.  (Overall housing shortage in urban areas - 18.78 million units till 2012).

Over a period of time, housing finance has evolved considerably. In the initial days, people either self funded their housing needs or participated in schemes launched by government owned institutions in the real estate sector like state housing boards and development authorities. Launch of HUDCO in 1970 represented a paradigm shift and for the first time housing finance was formalized. However, private sector participation in housing finance took shape only when HDFC was setup in 1977. In the late 1990s, commercial banks also got involved in housing finance.

On August 28, 2014, Prime minister launched the ‘Pradhan Mantri Jan Dhan Yojna’. The objective of the program is financial inclusion for all. Can this program cater to the housing finance needs of the BPL or marginalized Population in future? There is possibility of directly transferring interest subsidies on housing loans to the EWS and LIG categories.

In this section, we highlight the various steps taken by the successive governments to facilitate the need for housing and housing finance in India.

Growth of housing finance in india from Green Realtech Projects Pvt. Ltd

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta

What is the role of municipal corporations in cities and how do they help for harmonious living?

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

Owning a home is a dream that most individuals and families cherish. Not only it provides for stable shelter, societal acceptance, financial well being, but it also enables easy access to the credit market by working as collateral comfort / security. As per the Census 2011, 31.16 per cent of the total population is in the urban areas. However, owning a home is just one piece of harmonious living in the city of your dream/choice. There are other pieces which provide for the true wholesome living experience in a city. Some of these pieces are civic amenities such as water supply, sewage, drainage, recreational parks, internal roads, maintenance of buildings, etc.

And all of these amenities are provided by the local municipal corporations. Without the proper functioning of these corporations, living in a city would hardly be enjoyable. Even though, private developers are coming up with self sustainable townships that can address some of these issues, but importance of municipal corporations cannot be underestimated. These are government official bodies that provide civic services and administer a city with a population of 200000 or more inhabitants.

Therefore, having the knowledge about these municipal corporations is important in order to make sure that above listed civic amenities are provided continually. In the following table, information about municipal corporations is provided for Indian states and union territories such as West Bengal, Uttar Pradesh, Uttarakhand, Tripura, Tamil Nadu, Sikkim, Rajasthan, Punjab, Puducherry, Orissa, Nagaland, Mizoram, Meghalaya, Manipur, Maharashtra, Madhya Pradesh, Lakshadweep, Kerala, Karnataka, Jharkhand, Jammu and Kashmir, Himachal Pradesh, Haryana, Gujarat, Goa, Delhi, Daman and Diu, Dadra and Nagar Haveli, Chattisgarh, Chandigarh, Bihar, Assam, Arunachal Pradesh, Andhra Pradesh, Andaman and Nicobar Islands.

Municipal corporations in indian states from Green Realtech Projects Pvt. Ltd

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta

List of Housing Finance Institutions of India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

Owning a House is a dream for every household in the country. The new government has also set an ambitious target of ‘Housing for all’ by 2022, a challenging yet achievable task. To fulfill this objective, providing housing finance at affordable rates is paramount. Therefore housing finance companies will play an extremely important role in this noble endeavor.

Who are the major players in this area currently? Can the list be expanded given the enormity of task? Things will unfold as we move along.

There are 2 kinds of housing finance companies, one, which accepts public deposits, and the second kind do not accept public deposits. Housing finance companies are regulated and supervised by National Housing Bank. Housing finance companies offer loans for purchase of commercial and residential properties. Find below the detailed list of Housing finance companies in India:

List of housing finance institutions of india from Green Realtech Projects Pvt. Ltd

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta

Housing Shortage and Housing Finance Facts in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

'Roti, Kapda, aur Makaan' was a famous movie that highlighted the 3 basic requirements of life. And yet, a closer look at the 'Makaan' or housing statistics in India, we notice that there is still a long way to go before we fulfill these basic requirements in the lives of millions of people in India.

The new government in the center promises to provide 'Housing for All' by 2022. However, in order to achieve such results, the housing finance sector has to evolve at a greater pace. Currently, Mortgage to GDP ratio in India stands at 9%, which is much below the average of advanced economies.

Find below the detailed info-graphics showing the housing shortage and housing finance facts in India. The task of 'Housing for All' may seem daunting, however, it also presents an opportunity unprecedented in human history.

Housing and Housing Finance Facts in India | Create Infographics

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta

List of Housing Boards in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

To boost housing projects all over India and to achieve the goal of urban and housing development, Housing Boards have been formed in various States of India. These boards work towards expansion of the property market and development of well-planned and ideally located colonies. Incorporated by the Government of different States after hard work and strenuous efforts of many months, the mandate of the Housing Boards is to carry out well organized as well as aesthetically designed development programs all over the nation.

The objectives of the Housing Boards of India are:

• To provide housing solutions to needy citizens at reasonable prices.
• To construct houses and to allot them under the categories of high-income group, middle-income group, and low-income group.
• To select the sites for housing and decide the services to be provided.
• To formulate schemes for self-financing that helps the middle and high-income groups.
• To construct commercial complexes, multi-storied buildings, and shops and then to lease them out so as to secure financial resources.

Here is a detailed list of housing boards across India:

List of housing boards in india from Green Realtech Projects Pvt. Ltd

Source: National Housing Bank

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta

Foreign Direct Investment (FDI) Flows in real estate and housing sector in India

Author: Sachin Gupta | Find me on Twitter Follow @sach_gupta

Foreign Direct Investment (FDI) is a good indicator of a country’s attractiveness to global investors. India has been able to attract substantial amount of FDI into various sectors such as services, construction development, telecommunications, computer hardware & software, drugs & pharmaceuticals, chemicals, automobile, power, metallurgy, hotel & tourism. Significance of Foreign Direct Investment can hardly be underestimated and therefore government of India has devised policies which have attracted FDI into various sectors mentioned above. Here is a quick look at the flow of FDI into India since April 2000.

It can be noted from above chart that FDI flows into India jumped from financial year 2006-2007 on account of policy initiative by the government which permits FDI under the following forms:

1. Financial collaborations.
2. Joint ventures and technical collaborations.
3. Capital markets via Euro issues.
4. Private placements or preferential allotments.

Foreign Direct Investment (FDI) in CONSTRUCTION DEVELOPMENT: TOWNSHIPS, HOUSING, BUILT-UP INFRASTRUCTURE

The FDI Equity flow in housing and real estate sector was 8.9% in financial year 2008-2009, 11% in financial year 2009-2010, 5.3% in financial year 2010-2011, 8.9% in financial year 2011-2012, 5.9% in financial year 2012-2013 of total FDI equity flows into India. Overall, the sector has attracted a total of 23046.61 US $ Million from April 2000 to January 2014. The total FDI equity flows into India during this same period has been 212153 US $ Million. In other words, from April 2000 to January 2014, the construction development sector including of townships, housing, built-up infrastructure has attracted about 11% of total FDI equity inflows.

In 2005, India relaxed the norms for FDI inflows into real estate and housing sector by allowing Foreign Direct Investment under the automatic route which means no prior permission is required for approval either from Government of India or the from the RBI. The policy permits FDI up to 100 per cent under the automatic route in townships, housing and construction development projects and hospitality sectors such as residential complexes, shopping centers, malls, multiplexes, Cineplex, commercial offices, hotels/service apartments, resorts, hospitals, educational institutions.

Here are the detailed guidelines for FDI in Real Estate:

Guidelines for fdi in real estate in india from Green Realtech Projects Pvt. Ltd

Can the sector see increased FDI in near future?

Follow @sach_gupta

Have any Questions? Tweet to @sach_gupta