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Asia-PacificJanuary 8 2007

Affordable home financing for all

The International Union for Housing Finance has an important role to play in Asia and Africa, where there’s little penetration by formal sources of funding for housing, says its president, Renu Karnad.
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Having been formed in 1914, it is hard to imagine that the International Union for Housing Finance (IUHF) is fast approaching its centenary year, but given the fact that this organisation has such a distinguished history, it once again reiterates the importance of housing and housing finance across all countries. Despite being a small organisation, its members are tightly woven.

Having looked at myriad opinions and ideas from housing finance experts across the globe from a national, business and consumer perspective after the Vancouver World Congress, run on behalf of the IUHF by the Canada Mortgage and Housing Corporation, it became rather apparent that although global markets, including housing markets, are increasingly behaving in similar ways, the importance of local knowledge can never be underestimated.

The need to constantly explore and create innovative solutions at affordable costs was also apparent at the congress, and this is best done through platforms like the IUHF, which facilitates a sharing of ideas from across the globe.

Work to be done

There is a lot more work in the field of housing finance that still needs to be done, particularly in Asia and Africa. Many of these countries barely have any penetration of formal sources of funding for housing. We must be able to draw upon the resources, experiences and expertise of IUHF members more actively and work together on specific projects in countries that are keen on further developing their housing finance systems. It is therefore important that we get more mortgage lenders and others with an interest in housing finance to become IUHF members, especially from countries trying to increase the size of their housing finance markets from a very low base.

However, let us not assume that other countries with larger housing finance sectors know all the answers. One of the key similarities in many housing markets – especially in North America and Europe – is the rapid rate of house price inflation that is having such an unfortunate impact on the chances of young first-time buyers entering the housing market. The need to produce a solution to this problem is just as pressing as some of the other issues identified.

Spreading the word

Supplements such as this can play an important role in spreading the word about the importance of mortgage finance. Homeownership plays a crucial role in enabling people to build their families, their careers, their friendships, and indeed, their whole sense of well-being. Mortgages are central to this process.

While I eagerly look forward to the next IUHF Congress in South Africa in 2008, for any IUHF member travelling to India, here is an open invitation to visit HDFC.

Renu Karnad is also executive director of HDFC, India.

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