The proposed inclusion of affordable housing in the Union Budget 2018, with revised parameters and initiatives like dedicated Affordable Housing Fund (AHF), would give a boost to the sector and generate tremendous interest among the real estate developer community and home buyers, a top PNB Housing Finance official said.
Shaji Varghese, executive director and business head of PNB Housing Finance, said the government's move is in continuance with the pre-budget announcement of rationalizing Goods and Services Tax for affordable housing from 12 per cent to 8 per cent.
PNB Housing's strategy is to increase operations, grow customer base, boost profitability and strengthen its presence across the country.
PNB Housing is now among the to the fastest growing top five housing finance companies (HFCs) with net profit moving at a compound annual growth rate (CAGR) of 54 per cent for the past five years. Its loan portfolio grew nearly five times in the said period.
Ongoing policy measures like Real estate Regulatory Authority (RERA) and GST would bring about the much-needed discipline, transparency, and compliance and customer service standards in the sector, he said.
PNB Housing, at present, is the fifth largest in terms of portfolio size and second largest in deposit size in the housing finance sector.
Interest rates had been softening for a while and home loans are available at single digit interest rates, he said, adding the rates have bottomed out and some early signs of a reverse trend are visible.
One of the indicators is the hardening of deposit and bond rates. Home loans will continue to be offered at single digits in the near future, he said.
PNB Housing Finance has also added new financial products to meet the needs of the new-age customer, he said.
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