The number of housing finance companies has not only grown to more than 70 from 55 in 2012-13, but there are 80 more who are in the middle of starting their operations, said Arundhati Bhattacharya, former chairman of State Bank of India, while flagging this development as a concern.
“The growth rate of existing housing finance companies’ businesses have already come down. So don’t know how many more the market can accommodate,” she said at a conference, Affordable Housing, Liveable Cities, hosted by international magazine My Liveable City in Mumbai on Tuesday.
According to data shared by her, major cities having got a record inventory — the highest being 65 months in Noida and the lowest being 29 months in Hyderabad — highlighting the slump in demand. But the sector cannot be ignored by the government as a recent study by the National Council of Applied Economic Research revealed every ~1-lakh investment in housing created 2.6 jobs. The government’s effort to create dedicated freight corridors and highways would increase employment opportunities and hence the demand for houses along these corridors would grow.
“The real estate sector has several challenges but at the same it is critical to fuel growth in the country. High cost of land and inappropriate land parcels in cities are a major issue, besides high taxes and stamp duty,” she said, adding lack of rapid transport in cities as another major concern.
There are several sectors that are related to real estate: Cement, steel, paints, tiles, wood panels, lightings, pipes, adhesives and construction chemicals. So the growth of real estate sector is critical to the overall economy.
Co-founder of My Liveable City Shashikala Venkatraman said: “It is not just about finance, design, development or policy. We are keen to have all stakeholders use this discussion platform as we truly believe that momentum will be achieved only when there is all-round commitment to and alignment with the goals of the Pradhan Mantri Awas Yojana.”