Home loan market defies realty slump; to grow 20%
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Mumbai: The housing loan market is expected to grow between 18 and 20 per cent because of rapid urbanisation, double income families, nuclearisation of families etc, while the low income housing loans would grow 20-30 per cent per annum.
The share of credit for housing in overall credit rose from under five per cent in March 2001 to 12 per cent by March 2006.
However, the share of housing loans to the total bank credit declined gradually to about eight per cent by March 2012 as the rate of growth slowed down in the years subsequent to the boom years of 2006 and 2007, said M. Ravindran of Markets in Motion.
Outstanding loans by banks and housing finance companies amounted to Rs 6.20 lakh crore and of this two-thirds were accounted for by banks as on March 2012.
Institutional financing for housing in India is dominated by commercial banks because of the large number of branches that they have.
HDFC, the country’s largest lender, sees growth of 18-20 per cent in housing loans though it has surpassed 31 per cent growth in the first nine months of 2012-13.
In the last five years it says the real estate as an asset class has appreciated not less than 10 per cent and 90 per cent of its borrowers were first time home buyers. The demand is coming from smaller towns and from city outskirts.
Harshil Mehta, the chief executive officer of Aadhar Housing Finance, a company that is registered with the National Housing Bank and is part of the Dewan Housing Group, said the growth in the low-income housing group segment (Rs 15-20 lakh) is enormous and the growth outlook for 2013-14 is 20 per cent in the segment.
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In the last five years, it says the real estate as an asset class has appreciated not less than 10 per cent and 90 per cent of its borrowers were first time home buyers. The demand is coming from smaller towns and from city outskirts.
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