Keki Mistry: For affordable houses to take off, the land prices must come down

Affordable housing and speedy completion of projects have become the talk of the town. As per Keki Mistry, vice-chairman of Housing Development Finance Corp (HDFC), there is a lot of scope in affordable housing, provided land prices are reduced.

In an interview with Economic Times, Mistry said that land prices must fall to make homes affordable.

“The opportunity is huge, but if you have to make housing affordable, you will have to get land prices down. Second is funding of land. Today, largely private equity investors fund it and the interest rate they charge is huge. Third, expediting the process of project clearance. There should be a single-window clearance for approval of projects,” Mistry told ET.

Talking about the crisis in the real estate market, Mistry said that in this segment, any market would see some people under stress.

“We have not seen any undue distress for majority of them. We have not seen any pickup in developer lending, our growth in developer lending has remained in tune with the market. Our individual book is 73% and non-individual is 27%. Our non-individual includes lending to corporates for their office premises, developers, lease rental discounting. Developer lending in construction financing is 12-13%,” said Mistry.

At a time when India is looking to boost infrastructure, experts say the government should look at easing norms for stuck projects.

“When people talk about inventory, what they look at is under-construction properties. In reality, people buy only when the building is ready, which is very different from what it used to be in 2006-07. One should look at completed projects,” Mistry told ET.

Talking about FDI in real estate, Mistry said, “There is tremendous amount of interest in foreign money coming to India. Most of the money has come into various private equity funds, funds that cater to the affordable housing segment and funds that cater to larger developers. It is the middle and larger developers who have access to these funds.”