Affordable housing segment to grow at 30%, faster than industry: ICRA

NEW DELHI: The affordable housing segment is likely to grow at a faster pace than industry at above 30% over the medium term on increased focus by the government, according to rating agency ICRA.

“Efforts are being made to address the supply side, demand side and affordability issues and are likely to expand the borrower base,” said Rohit Inamdar, Senior Vice President and Group head Financial Sector Ratings.

The government has increased its focus on the affordable housing segment by giving 39% higher allocations under the Pradhan Mantri Awas Yojana (PMAY) for this financial year against FY2017 and extending the Credit Linked Subsidy scheme to loans of value upto Rs 1.2 million to cover the middle income group (MIG) people as well.

The delinquencies in the affordable housing and self-employed segments reported some increase after demonetisation, owing to their relatively higher share of self employed segment which got more impacted due to demonetisation. The delinquency increased from 1.07% as on September 2016 to 1.25% as on December 31, 2016.

ICRA feels there could be further increase in delinquencies, especially in the affordable housing and self-employed segments.

Liquidity of properties may get impacted after demonetisation given the expected correction in property prices impacting the loss given default, according to the rating agency.

“Overall we expect gross NPAs for HFCs to remain range bound between 0.9% – 1.3% over the medium term,” Inamdar said.

(source by:-The Economic Times)  

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