Housing Price May See Some Correction: National Housing Bank Says

 Indian housing finance Companies’ regulator NHB (National Housing Bank) said on recently that there may be “some price correction” in the housing segment as there is inventory build-up in some areas.

Some Price Correction ..!

Mr. R.V. Verma, Chairman & Managing Director, NHB said, “Such projects which are not selling on account of high price perception may see some price correction partly in the light of current downward revision in the home loans”

Meanwhile, major home loan lenders such as SBI (State Bank of India), PNB (Punjab National Bank), HDFC, ICICI Bank and Vijaya Bank, Bank of India, Bank of Baroda have reduced housing loan rates.

Psychology of Oversupply..!

“There is a psychology of oversupply which will play out during the year in the form of price correction and becoming more market oriented. It would be difficult to say how much price correction could take place. NHB posted 39% increase in net profit at Rs. 387 crore for the financial year ended June 2012."

The net profit of the NHB stood at Rs 279 crore in the previous fiscal.

The NHB made a total loan disbursement of Rs. 14,454 crore during the year against Rs. 12,035 crore in the previous fiscal, an increase of 20%.

However, sanctions shot up by 64% at Rs. 23,460 crore as compared to Rs. 14,293 crore in 2010 -11.

Interest income of the apex housing finance institution NHB improved by 27.9% at Rs. 2,478 crore, as against Rs. 1,938 crore in the previous fiscal.

NIM (Net interest margin) of the financial institution rose to 2.18% at the end of June 2012 from 1.79% at the end of June 2011.

Mr. R.V. Verma also said, ''Measures are being taken to assess extent of project not completed and assess the reason for the delay."

Finance minister Mr. P Chidambaram in his meeting with heads of public sector banks in August, 2012 had pointed out that about 5 (Five) lakh flats were lying vacant in Mumbai despite robust demand for housing.

Following this, Financial Services secretary Mr. D K Mittal met bankers & the real estate developers body CREDAI (Confederation of Real Estate Developer’s Associations of India) earlier this month & discussed various issues affecting the sector.

The NHB has been entrusted with the job of identifying viable projects across several cities & bring together a consortium of lenders to fund these projects.

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