RBI sees continued uptick in housing demand

The demand for housing finance will continue to grow in the future but there was a need to develop more statistical tools to gauge the evolving trends, Reserve Bank Executive Director Deepak Mohanty today said.

 

"Keeping in view the demand-supply gap, our favourable demography, increasing urbanisation and growth prospects, the demand for housing finance will continue to grow," he said speaking at the RBI's Statistics Day Conference here.

 

However, he said the changing business cycles can impact household and banks' balance sheets, and hence, there is a need to develop a database on housing finance.

 

"Risks also arise to household and bank balance sheets due to fluctuations in prices and changes in the business cycle. Hence, there is a need for developing a data base on housing finance."

 

Mohanty said at present there are two housing price indices - sector regulator NHB's Residex, which includes data from 20 cities, and RBI's own index which covers nine cities.

 

The RBI Executive Director said information like the loan-to-value (LTV) ratio, equated monthly instalments (EMIs) to income ratio, price-to-income ratio and borrowers' characteristics are also very important.

 

Speaking on challenges on the statistical front for the Reserve Bank, Mohanty pointed out that it needs to device methods to make better use of granular data from banks.

 

Additionally, it needs to enhance the scope and coverage of corporate finance statistics, he said, adding a link needs to established with the Corporate Affairs Ministry for the same.