Housing Finance Companies facing uncertain future ! Avoid

HFCs -
Prominent among them are
HDFC
LIC Housing Finance
CanFin Homes
Indiabulls Housing
PNB Housing
A comparative chart of the leading 2 players is given below :

It is clear from this that the sector has been giving negative returns more so in case of LIC Housing due to the challenging times we are in.

The following are the challenges faced by HFCs

1. Millennial mindset - of asset light life style
2. High prices - a 2BHK flat costs 50 L and 3 75 Lakhs in all metros
3. Uncertain Job market
4. Limits flexibility - movement to other city for job / career is a hindrance
5. Availability of rented accommodation.
6. Lack of liquidity - a falling interest in used apartments for second sale

Long term investors should avoid this sector as it is unlikely to give any capital appreciation over next 3–5 years time frame.

For more long term investment opportunities get in touch with us.

Raghav
Equty Research Analyst

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