n RBI executive director says need to make public housing price index on regular basis
Securitisation of housing loans and a long-term fixed rate loan products are needed to develop the housing finance market and mitigate the risks, said Deepak Mohanty, the executive director at the Reserve Bank of India.
?Given our early stage of development of the mortgage market, there is a scope for housing disintermediation, both through more active involvement of apex refinancing institutions like the NHB and also through development of simple securitised mortgage products backed by adequate regulatory safeguards,? said Mohanty in a speech at an event on Friday.
Mohanty stressed on the need for more database on the housing market and said RBI must make public its housing price index on a regular basis. Currently there are two house prices indices available, the Residex of National Housing Bank and the House price index of RBI.
The central bank?s index is derived from data of 19 cities in the country.
RBI index shows prices have doubled since 2008-09. The central bank is also developing a housing asset price monitoring system to cover details such as loan-to-value ratio and price to income ratio, Mohanty said.
Mohanty said that the share of housing loans in banks’ total loan book has shrunk to about 8% by 2012 from as high as 12% in 2006.