Demand-supply gap remains even when affordable housing finance companies grow
The overall Indian real estate market might be down, but a new report has found that affordable housing finance companies catering to low-income customers have bucked the trend and grown at an impressive pace over the past five years.
The ‘Low-income Housing Finance Market’ report by industry body Federation of Indian Chambers of Commerce and Industry (FICCI)released on Wednesday says loan books of these companies grew from close to Rs 1,000 crore in March 2013 to over Rs 27,000 crore in December 2017 and they facilitated the ownership of more than 230,000 homes.
Financing affordable homes in India is not easy as most low-income households work in the informal sector and do not have reliable documentation of income which makes it tough for them to get housing loans from banks and traditional housing finance companies.
The report says 62% of the new housing finance is being used to fund self-constructed standalone houses while 38% of financing from affordable housing finance companies is taken up by low-income customers to buy apartments, often in areas with higher land costs.
The report adds that the growth in housing finance has still not reached a large share of the urban poor.