The Real Estate saga so far: a perspective!
Real estate financing in India has changed significantly over the past 50 years for both developers and buyers expanding from unorganized moneylenders to the entire gamut of funding sources, including loans from banks and housing finance institutions (HFIs), private equity, public equity offerings, bonds, and debentures.
Buyers have seen the shift from own resource-funded home purchases to bank-funded mortgage finance. The two key institutions set up in 70’s, the public sector housing company, the Housing and Urban Development Corporation, in 1970, and the private sector housing finance company, the Housing Development Finance Corporation, in 1977 has boosted the financial flexibility of developers to provide adequate propecia package insert real estate supply on the other.
In the late 1980s, the Government of India (GoI) started recognizing the integral role of housing in the overall economic development of the country and undertook various policy measures to enhance the financing options of the sector. In 1988, the National Housing Bank (NHB) was set up to channel resources to housing finance. In the same year, the GoI introduced the draft National Housing Policy, which was later adopted by the Parliament in 1994.
During the 1980s and 1990s, HFIs emerged as key lenders in the real estate sector. These HFIs were set up either by industrial groups and individual developers (in which case the source of funds was public deposits or NHB refinancing) or as subsidiaries of commercial banks and insurance companies (which largely tapped banking or insurance funds). The interest rates on loans closely followed the competitive activity in the house financing front. While HFIs did not face significant competition from banks, interest rates remained highly stable and unchanged until the early 1990s. The maximum tenure of revised home loans also remained under 15 years, as buyer appetite for high-tenure loans was also low.
The fixed interest rate loans resulted in asset-liability mismatch for HFIs. This, along with competition from banks, led to the emergence of variable interest rate home loans.
Many acomplia without prescription real estate companies are already trying to raise funds at Singapore-listed real estate investment trusts which in turn would help diversify the investor base in the real estate sector. Increased opportunities in funding have also enabled the transformation of the sector from a largely unorganized one to a largely corporate one. This, in turn, will soon translate into a strong, resilient real estate sector, thereby paving the way for a robust economic growth.
Source: [Economic Times India Times]
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One Comment on The Real Estate saga so far: a perspective!
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Susan Kishner on
Wed, 26th May 2010 1:31 am
Just wanted to say HI. I found your blog a few days ago on Technorati and have been reading it over the past few days.
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