Page 16 - Banking Finance June 2019

HOUSING

Mumbai and Bengaluru register lowest growth in glo-
HDFC ties up with IMGC
In order to offer a mortgage-guaran- bal luxury housing market
t e e d Mumbai and Bengaluru have reported the slowest growths in terms of price
h o m e appreciation in the fast quarter of the ongoing
l o a n year, according to the Knight Frank's Prime Glo-
p r o d - bal Cities Index.
u c t ,
As per the index, the housing holds the top 5%
h o u s -
of the housing market. Luxury residential prices
ing fi-
have reported its lowest rate of annual growth
nance major HDFC Limited has en-
since the last quarter of 2009, which has been
tered into a partnership with the
identified as the threat. Knight Frank remarked that two years earlier, prime
India Mortgage Guarantee Corpora-
property prices were increasing at an average rate of 4.3% per annum, that
tion (IMGC).
has now slowed down to 1.3%.
The partnership will emphasize of
The consulting firm has attributed the dip in growth during the first quarter of
making future possibilities so that
2019 to the looming threat of a global trade war, uncertainty surrounding Brexit
HDFC can penetrate the home loan
and the International Monetary Fund's projection that 70% of world's econo-
market as well as access a vast cus-
mies would see a slowdown in growth this year.
tomer base by helping them to pur-
The findings revealed that Delhi has secured the 7th position by reporting prime
chase a home of their choice.
property price growth of 5.8% on 12-month and 4.4 % on three-month basis.
The customers will be benefitted
Bengaluru securing 20th position has witnessed a growth of 2% on 12-month
with more home loans on the basis and 0.8% on three-month basis. Mumbai, the commercial capital which houses
of enhanced eligibility and also be- hundreds of billionaires of the country, is ranked 31.
yond their retirement period.
Shishir Baijal, chairman and managing director, Knight Frank India, said, "The
Renu Sud Karnad, Managing Direc- Indian residential market has been stagnant for a considerable period of time
tor, HDFC Ltd., said, "We are deter- with sales velocity, especially of prime property, remaining slow, causing signifi-
mined to strengthen the housing fi- cant inventory overhang across major markets."
nance segment in India. Our part-
nership with IMGC is one big step NHB asks housing finance firms to appoint CRO
towards it. Mortgage-guarantee is
National Housing Bank (NHB) has said that the bigger housing finance compa-
already a popular product in interna- nies (HFCs) must appoint a chief risk officer (CRO)
tional market and this partnership to improve risk management practices.
will help diversify our offerings to a
"While the boards of HFCs should strive to follow
wider segment of customers."
best practices in risk management, it has been
She added, "This will also help us to decided that HFCs with asset size of more than Rs
support the government of India's 5,000 crore shall appoint a CRO with clearly speci-
mission under the Prime Minister fied role and responsibilities," NHB said in a circu-
Awas Yojana Scheme (PMAY) to pro- lar, adding that the CRO will act independently to "ensure highest standards of
vide housing for all by 2022." risk management."
The requirement of a wide range of The circular added that the board of HFCs should put in place policies to "safe-
customers in three defined variants guard the independence of the CRO" who should report directly to the manag-
would be addressed by the partner- ing director and chief executive officer.
ship, inclusive of middle age-salaried
The circular will cover top 15 HFCs controlling 95 per cent of the business, in-
customers, self employed customers
cluding Housing Development Finance Corporation, LIC Housing Finance, Tata
and young salaried customers and a
Capital, GIC Housing Finance, PNB Housing Finance, Indiabulls Housing Finance,
wide segment of customers.
and Dewan Housing Finance (DHFL), among others.
16 | 2019 | JUNE | BANKING FINANCE