Home Loans

Index : 1,576 | 1Yr : -20.94% | 1Mo : +12.16%

Category : Sectoral Trackers

Min Investment : 12,928

Sharpe Volatility Trend

With the rising trend in nuclear families among the young working population and the rapid decline in joint families, buying a house takes up the entire life savings of most families. Since a home is considered a personal wealth, it is closely related to the socio-economic strata of the population. House prices in India have been steadily rising as there is a chronic shortage of supply to the tune of 20 million units in urban areas.

There is intense competition for market share in this space as large banks have stepped in in the recent years. When the credit off take in the industrial sector is low, the competition from the private banking sector has become high. An important point to note is that housing finance companies are regulated by the National Housing Bank (NHB) whereas banks are regulated by the Reserve Bank of India (RBI).

Since majority of houses are purchased via mortgage loans, there is a huge opportunity for growth for these companies. Housing finance accounts for approximately 8% of GDP which is very less when compared to countries like China (12%) , Malaysia (29%), Spain (46%) and USA(80%).
The growth of this sector can also be boosted when the Smart Cities Mission is implemented successfully.

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