“Housing for All by 2022” mission Centre’s new direction to housing sector
Centre’s “Housing for All by 2022” mission is expected to come up with various schemes aiming to provide a home to each one by 2022. The special schemes that are about to land will be a boost to the housing sector in India. These plans will be a great support to buyers as well as to the developers.
HDFC Mutual Fund (MF), which has filed offer documents with markets regulator Sebi, plans to launch a close-ended thematic equity scheme ‘HDFC Housing Opportunities Fund’. With this, various fund houses are expected to launch new schemes that will invest in housing companies.
Mutual funds has been allowed to invest in REITs and InVITs as part of its efforts to make real estate and infrastructure investments trusts attractive for investors. Mutual Fund managers have had limited exposure to real estate developers for many years now. But they have been adding significant positions to allied industries such as housing finance companies, cement and certain niche plays like ceramics and tiles.
The new scheme would affect at least 70 per cent of its corpus in equity and equity-related instruments of entities in housing and its allied business activities and it can invest up to 30 per cent of its assets in shares of entities other than housing. Also, it has the provision for investment in debt and money market instruments as well as REITs (Real Estate Investment Trusts) and InVITs (Infrastructure Investment Trusts).
Besides, RERA (Real Estate Regulatory Act) will be another factor that will drive growth in the real estate sector that was battered for many years. The centre government had launched its ambitious Housing for All by 2022 scheme, in June 2015, paving the way for affordable homes for the urban poor and slum dwellers at low interest rates.
The critical importance of affordable homes is doubtlessly an immutable truth in any country and its economy. While there were also reputed national players active in this segment, affordable housing in India has historically been the playing ground of smaller, non-established developers who did not follow any particular rule book.
With the government’s recent focus on affordable housing, there can be an interesting play on housing and allied industries. Mutual Funds focusing on particular sectors and themes tend to be more volatile.