India Mortgage Industry

Overall Rating: star ratingstar ratingstar ratingstar ratingstar rating[5/5]Total Votes [ 2 ]  
Rate this page:

India Mortgage industry until recently was an unorganized sector. But today organized mortgage sector is witnessing steady growth. It is estimated to be US $ 18 billion industry. Huge real estate requirements and its subsequent development has fueled its growth.

The predominant market leaders in organized 'India Mortgage' sector are housing finance companies like LIC Housing Finance, HDFC, ICICI Home Finance etc. Although, size of organized sector account only for 25% of the total housing investment in India (Source: LIC Housing finance). But commercial banks both National and Foreign Banks along with Cooperative banks and other non-banking financial companies (NBFCs) are also catching them up at a very fast pace. Mortgage rates in India industry is consistently registering 20-50 % growth (YoY) from the year 2000 onwards. Low income groups communities are still ignorant and skeptical of about it, the bottlenecks are –
  • Affordability and
  • Accessibility.
'India Mortgage' industry is heating up and there is a mad rush for credit. The 'Mortgage India' market is estimated to grow at a lightening pace in few years to come. Although, investment in housing has grown steadily over the past years as the proportion of outstanding housing loans as percentage of GDP increased from 3.4 per cent in 2001 to 7.25 per cent by 2005.

Housing finance gives a measure of the socio-economic status of people. It is regarded as a critical sector in terms of policy initiatives and interventions. Financial allocations in the 5 Year Plans and fiscal measures related to housing has been taken and implemented successfully.

To help it grow and fulfill its huge requirements India Mortgage industry needs indirect government participation, as a guardian and facilitator. Private funds and even FDI should be encouraged to see 'India Mortgage' industry grow further. Overall revamping of land laws, rental laws, fast mutation and registration process along with setting up of credit rating organization and mortgage insurance will only help India in realizing its housing dreams. This will accelerate organized growth of 'India Mortgage' market and at the same time will help reach all sections of Indian society.

Last Updated on 5/26/2011