Experts at IMF-IIMB conference on Housing Markets say governments in many emerging markets, including in India, are actively using a wide range of policies to manage house price booms
"That an international conference on housing markets is being organized in India is great because India is an important Emerging Market Economy (EME); house prices in EMEs are booming and doing something about it is high on the agenda of policymakers given the past history of housing busts causing recessions and financial instability," observed R V Verma, former Chairman, National Housing Bank.
Delivering the inaugural address at the IIMB-IMF International Conference on 'Housing Markets, Financial Stability and Growth', on Thursday (December 11), Mr Verma described the critical role played by the National Housing Bank in the development of India's housing finance system.
He congratulated the IMF and IIMB for work on the first Housing Price Index in Emerging Market Economies that will be launched tomorrow (Dec 12) at the conference, he said he was sure such a credible index would certainly bring "big value".
The index takes the pulse of house prices in emerging markets as a whole. It is based on data for 30 emerging markets, including India.
Drawing attention to the housing market in India, Dr. Charan Singh, RBI Chair Professor of Economics, IIMB and a driving force behind the three-day conference, said: "There is a need to strengthen housing-related institutions like National Housing Bank and encourage them to undertake extensive research and build supporting infrastructure like a historical data base of builders, developers and housing contractors, and data bases on construction costs across the country as is readily available for many advanced countries."
"In India, housing generally embodies lifetime savings of many individuals. Therefore, the government - State and Centre - needs to be sensitive to housing sector," he added.
When housing markets go bust, many in society, including many low- and middle-income people end up losing their shirts. So trying to tame house price booms is essential. But at the same time housing is a basic necessity. So, the challenge for policymakers in many emerging markets is to provide homes for their people but to do so in a way that people do not end up losing their shirts.
"The good news is that there is active use of macro prudential policies. The IMF has learnt, from talking to many emerging market central banks and from its own new research, that instead of benign neglect, governments in many emerging markets, including in India, are now actively using a wide range of policies to manage house price booms," said Ratna Sahay, Deputy Director, Monetary & Capital Markets, IMF, describing the policy framework that is in use in many countries.
In the discussions that followed, senior policymakers, bankers and academics analyzed the role of monetary policy and banking institutions, in dealing with the housing sector. The policy makers included Arvind Virmani (India's former Executive Director at the IMF), Hans Genberg (Bank Negara Malaysia and SEACEN) and Mico Loretan (Swiss National Bank).
"Housing is not just about taming bubbles. In many emerging markets, there is a critical need to develop housing finance systems and manage the many challenges posed by urbanization," said Professor Chetan Subramanian, who presented a paper on the role of housing as an asset and also some of the good that can, in some instances, come out of housing bubbles.
Experts at IMF-IIMB conference on Housing Markets say governments in many emerging markets, including in India, are actively using a wide range of policies to manage house price booms
"That an international conference on housing markets is being organized in India is great because India is an important Emerging Market Economy (EME); house prices in EMEs are booming and doing something about it is high on the agenda of policymakers given the past history of housing busts causing recessions and financial instability," observed R V Verma, former Chairman, National Housing Bank.
Delivering the inaugural address at the IIMB-IMF International Conference on 'Housing Markets, Financial Stability and Growth', on Thursday (December 11), Mr Verma described the critical role played by the National Housing Bank in the development of India's housing finance system.
He congratulated the IMF and IIMB for work on the first Housing Price Index in Emerging Market Economies that will be launched tomorrow (Dec 12) at the conference, he said he was sure such a credible index would certainly bring "big value".
The index takes the pulse of house prices in emerging markets as a whole. It is based on data for 30 emerging markets, including India.
Drawing attention to the housing market in India, Dr. Charan Singh, RBI Chair Professor of Economics, IIMB and a driving force behind the three-day conference, said: "There is a need to strengthen housing-related institutions like National Housing Bank and encourage them to undertake extensive research and build supporting infrastructure like a historical data base of builders, developers and housing contractors, and data bases on construction costs across the country as is readily available for many advanced countries."
"In India, housing generally embodies lifetime savings of many individuals. Therefore, the government - State and Centre - needs to be sensitive to housing sector," he added.
When housing markets go bust, many in society, including many low- and middle-income people end up losing their shirts. So trying to tame house price booms is essential. But at the same time housing is a basic necessity. So, the challenge for policymakers in many emerging markets is to provide homes for their people but to do so in a way that people do not end up losing their shirts.
"The good news is that there is active use of macro prudential policies. The IMF has learnt, from talking to many emerging market central banks and from its own new research, that instead of benign neglect, governments in many emerging markets, including in India, are now actively using a wide range of policies to manage house price booms," said Ratna Sahay, Deputy Director, Monetary & Capital Markets, IMF, describing the policy framework that is in use in many countries.
In the discussions that followed, senior policymakers, bankers and academics analyzed the role of monetary policy and banking institutions, in dealing with the housing sector. The policy makers included Arvind Virmani (India's former Executive Director at the IMF), Hans Genberg (Bank Negara Malaysia and SEACEN) and Mico Loretan (Swiss National Bank).
"Housing is not just about taming bubbles. In many emerging markets, there is a critical need to develop housing finance systems and manage the many challenges posed by urbanization," said Professor Chetan Subramanian, who presented a paper on the role of housing as an asset and also some of the good that can, in some instances, come out of housing bubbles.