Home Loans Shifting from Affordable to Higher Value – Latest Trends | India Business News – Times of India

There are signs that growth in home loans is shifting from the affordable segment to higher-value homes. The average size of home loans has increased by 22% to Rs 24.7 lakh in FY23 from Rs 20.2 lakh in FY20.
According to data on home loans analysed by credit bureau CRIF High Mark, there is a shift in originations, both by value and volume, from the ticket size range of Rs 5 lakh to Rs 35 lakh to Rs 35 lakh to Rs 75 lakh.
The data shows that loans above Rs 75 lakh accounted for nearly 30% of new mortgage originations during April-June 2023, while loans between Rs 35 lakh and Rs 75 lakh constituted 31.4% of new loans. Less than 37% of the mortgages were for loans below Rs 35 lakh.
In comparison, in FY20, only 19% of loans were above Rs 75 lakh, while 28% were between Rs 35 lakh and Rs 75 lakh. The bulk of the loans (53%) were below Rs 35 lakh in FY20.
According to the “How India Lends” report released by the credit bureau, the portfolio of home loans outstanding stood at Rs 30.7 lakh crore as of June 2023 – a growth of 15% over the previous year. While the value of new loans originated in FY23 at Rs 9.1 lakh crore was 18% more than the previous year, the number of loans grew by only 13% to 37 lakh.
The findings are in line with the experience of large home loan providers like the erstwhile HDFC. According to HDFC’s data, 53% of its loans (in value terms) were to the high-income group in FY23. The value was only 26% in FY20. During the same period, the share of the low-income segment fell from 16% to 9% in value terms.
Bankers stated that there were two reasons for the increase in the value of loans. First, there has been a preference for larger houses post-pandemic. Second, while demand for affordable housing had eased, demand for premium houses remained steady. Besides, housing prices in most parts of the country have increased as demand has picked up.
There has been a slight increase in delinquencies, with the portfolio at risk in the 91-180 days overdue category rising to 0.8% in June 2023 from 0.4% earlier. However, delinquencies were steady at 2.1% in the 31-90-day category, while they dropped marginally to 1.5% from 1.8% in the 360-day past due category.
Home loans are dominated by public sector banks and private banks (by value and volume). While housing finance companies and public sector banks dominate the segments below Rs 75 lakh, private banks lead the Rs 75 lakh-plus home loans.

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