While I agree with you on not comparing mortgage rates of US and India, your conclusions are contradictory. If real mortgage rates are worse in India crisis should have happened in India rather than US.
In reality, crisis precipitated because of large scale mortgage application fraud, stagnating real income and rising real interest rates before crisis. I don’t think any of these situations remotely exists in India. Even valuations are not outrageous. As an investor we are far away from the wrong side of the sword.
Regarding non-formal sector lending, we should consider it an opportunity since mortgage fundamentals are based on income potential rather than it is coming from formal or informal. We don’t have to go too far to have comparable business. Just check what was Sriram Transport Fin doing ten yrs back. They have created an empire out of lending to informal sector with absolute volatile income profile.
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