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Real estate industry

Financing Housing and Real Estate Projects in India: Industry Experts Weigh In

Strategic Insights

— 1 min read

Industry experts shared their views on financing housing and real estate projects in India, highlighting the need for proactive policies to facilitate growth. With an estimated housing shortage of over 25 million, the sector requires an enabling environment to increase the flow of funds.

Key Takeaways:

  • The current mortgage industry in India is just 7%, with a need to emphasize its growth, according to Shri Nagesh Pydah, CMD, Oriental Bank of Commerce. He emphasized the importance of focusing on affordable housing, as financial institutions have more interest in lending.
  • The ratio of home loans is more than the share of personal loans, and developers should stress on affordable housing, as mentioned by Shri Nagesh Pydah.
  • The Ministry of Housing and Urban Poverty Alleviation (MoHUPA) has created two working groups to address real estate concerns and financing housing and real estate, as stated by Mrs. Aruna Sundarajan, IAS, Joint Secretary (RAY).
  • The focus should be on better synchronization between the government, financial institutions, and developers to achieve housing for all, as advised by Mrs. Aruna Sundarajan.
  • NAREDCO suggests that hotels, restaurants, hospitals, warehouses, educational institutions, and industrial parks should be included in the sub-category of Commercial Real Estate, with an upper ceiling of 4% out of the total ceiling of 10% for CRE category.
  • Mr. Sunil Dahiya, Chairman of Business Development, NAREDCO & MD, Vigneshwara Developers Pvt. Ltd, suggested that the government's initiatives are unable to justify the housing requirements in the country, with a huge gap between performance and demand.
  • Mr. Sunil Dahiya also suggested that banks should provide longer loan repayment durations (30 years against 15 years) and finance land for urban development from the beginning.

Statistics:

  • The estimated shortage of housing in India is over 25 million.
  • The current mortgage industry in India is just 7%.
  • The ratio of home loans is more than the share of personal loans.
  • NAREDCO suggests that the upper ceiling for Commercial Real Estate (CRE) category should be 10% or more.
  • The total priority sector credit exposure of 20% assigned to CRE should be increased with a proportionate hike in the sub categories of total bank advances.

Sources:

  • National Real Estate Development Council (NAREDCO)
  • Shri Nagesh Pydah, Chairman & Managing Director, Oriental Bank of Commerce
  • Mrs. Aruna Sundarajan, Joint Secretary, Ministry of Housing & Urban Poverty Alleviation, Govt. of India
  • Mr. Rohtas Goel, Chairman Omaxe
  • Mr. Sunil Dahiya, MD, Vigneshwara Developers Pvt. Ltd

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