Housing Finance, Real Estate Growth and More Action

Housing Finance, Real Estate Growth and More Action
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Till recently, there was huge ac-tivity in the housing and non-banking finance companies (NBFCs). As per ICRA’s estimates, the total housing credit outstanding in India as on March 31, 2016 was around Rs. 12.5 trillion as against Rs. 10.5 trillion on March 31, 2015, indicating a growth of 19% in FY16.

After demonetisation, home buyers will rejoice with the expected fall in property prices. But for many housing finance companies and NBFCs, there has been a significant drop in their market value. With real estate prices in for a sharp price correction, the drop in the share value is as steep as 26%-36%. The best performers, until recently, are now sinking as their trading value has hit a new low. This, however, translates to an opportune time for investors to buy shares and stocks in these companies. Available at an affordable price, the share price of these companies are expected to pick up after a year or so (as analysts predict).

On a positive note, housing finance companies and NBFCs have a reason to rejoice after demonetisation as the average size of home loans is now expected to increase. People are less likely to do cash transactions, and there-fore, value of home loans is expected to only grow. In addition, there is lot of action expected to happen in the housing sector, with property prices expected to come down.

Banks have recently increased their focus on housing credit. The outstanding housing finance portfolio of grew to Rs 8,05,800 crore in September 2016 from Rs 6,82,900 crore a year ago, ac-cording to Reserve Bank of India data.

Demonetisation should also be viewed as a positive step by industry and fiance experts. Real estate sector bill, demonetisation, and GST are together expected to create a positive market sentiment.

For buyers post demonetisation means:

• Transparency in dealings
• Regulated price for residential properties
• Better access to home loans
• Affordable home options
• Expect a drop in resale of properties

Smart tip: The total stamp duty and registration charges you pay, at the time of buying the house is exempted under IT section 80C. It can only be claimed in the same year of your purchase.

(Advertiser-Sponsored Feature: A Marketing Initiative)