The real estate sector and consequently the mortgage business in India is passing through a peculiar stage of evolution where the demand for housing exists simultaneously with unsold inventory across all metros and cities. Has the real estate sector misunderstood the Demand Supply dynamics or the sector? These call for revisiting the product segmentation strategies and consequently a close relook at financing strategies to reduce lender’s risk and also increase business in such difficult times.
The real estate sector, which has gone through two business cycles with one underway, continues to be highly unregulated. The Real Estate Regulatory Bill passed by the parliament is expected to bring some order and consumer protection to laissez faire situation that prevails in the sector. Mortgages in India have been hovering around 5 to 6% of GDP not because of lenders apathy but possibly because the way of doing business needs to be relooked at. There is now a rapid realization that housing for all means addressing the segment of users who are looking at affordable housing purely for residential purposes rather than an investment asset. The government’s focus on housing for all with attractive incentives and mortgage guarantee schemes means that the Industry has to evaluate products to address business and viability issues afresh. Affordable housing needs to be looked at as a business imperative rather than a stop gap till the traditional markets sees a revival, which does not seem a possibility in the near term.
Thus, lending at this point in time needs a careful and well considered sustainable approach to the concept of affordability as against developer’s concept of affordability.
This programme, aimed at mortgage sales & credit risk assessment professionals endeavours to present the concept of affordable housing in a perspective referenced to various factors which determine affordability and opportunity and bring in a more concerted and market driven approach to Mortgage lending.
