South Asias housing and housing finance markets have grown at an impressive 30% rate in the past decade, but are limited to upper-income groups.
Around 30 million middle- and lower- class households in South Asia which accounts for 11% of the regions population have the willingness to pay, but unable to have access to mortgages. In India alone, estimates of the housing shortage range from 20 million to 70 million yet as much as half of this excess demand can be profitably serviced by the housing and housing finance markets.
Janamitra Devan, the World Banks vice-president for finance and private sector development has said that there is a considerable potential to expand housing and housing finance to middle- and lower-income households in South Asia, provided appropriate market institutions, enabling policies, and a varied range of innovative housing and mortgage products are in place.
In some countries such as India, this shift is already afoot. In India, it may be commercially viable to build housing for 2328 million households (3545% of urban India) whose monthly household incomes are in the range of Rs 5,00011,000.
The good news is that housing and housing finance services have the potential to expand to middle- and lower- income families, said Tatiana Nenova, the World Banks senior economist, private and financial sector development for the South Asia. This requires an improved land administration, strengthened legal framework for all aspects of housing, and promotion of long-term funding for mortgage lenders and developers. Nenova added.