Financial institutions focussing on house loans expect some sops in the ensuing budget with the Prime Minister Narendra Modi already announcing reduction in interest rates to affordable housing sections in his address to the nation last month after the demonetisation decision.
The interest rates may also go down further due to liquidity, with the banks and the industry waiting for the new RBI policy that will decide and influence further cuts, observed Harshil Mehta, CEO, DHFL while speaking to reporters here.
Mr. Mehta said there is a 70 million units gap between demand and supply in the affordable housing segment and land availability is a big issue to be dealt with. However, he sees a 15 to 17 percent growth in the housing sector. Out of the 1.20 lakh crore market, 20 to 30 percent is in the unorganised sector and the new initiatives after demonetisation may streamline it as developers will have more access to organised credit.
Mr. Mehta said both Telangana and Andhra Pradesh have the potential to grow and there is a likelihood of 30 per cent surge on house loans. With regard to DHFL, he said Telangana constitutes 20 percent of house loans business in South India with Hyderabad alone taking 30 percent of it. The DHFL, he said, focusses on affordable housing segment and their average ticket size was Rs. 14.62 lakh in Hyderabad indicating that houses were still affordable here. Smart cities concept and housing for all initiatives will drive the growth. DHFL currently operates in 9 districts in Telangana and 13 districts in Andhra Pradesh with its 32 branches. The company has registered a net profit growth of 31.67 percent to Rs. 244.77 crore for the quarter ended December 31, 2016.
