Home loan securitisation market to remain robust
Securitisation of housing loans continue to be riding on growth momentum despite a brief hiccup brought in by the liquidity pressure unleashed by the demonetisation measures that the realty sector is still grappling with.
The volume of mortgage-backed securities touched . Rs 19,000 crore in the first half of 2016-17, far exceeding the annual figures of . Rs 15,000 crore in both 2013-14 and 2014-15, a Crisil Ratings study showed. In fiscal 2015-16, securitisation touched . Rs 29,400 crore, an all-time high for Indian securitisation market.
“Mortgage-backed securities and pass-through certificates –because of their longer tenures and lower delinquencies -can attract long-term investors such as insurers and pension funds and also spur securitisation in non-priority sector loans, ultimately leading to a deepening of the market,” Krishnan Sitaraman, senior director, Crisil Ratings, told.
Overall securitisation volume in the first quarter of the current financial year itself stood at Es 17,000 crore for the first quarter of the current fiscal. Mortgage backed securitisation (MBS), which includes residential loans and loans against property (LAP), accounted for more than half of overall market volume during this quarter compared with 42% last fiscal. While the Indian securitisation market is picking up momentum, the concerns over such transactions and collateral supporting are minimal.
“As opposed to US market, multiple mortgages on same property are rare in India. Consequently, borrower equity increases significantly over time. This coupled with the emotional attachment (since most homes are self-occupied) has resulted in asset quality remaining robust in home loans,” Sitaraman said.