Home loan market grows 9.6% in December quarter: report
The industry experienced 10.4% point-of-sale growth in the December 2019 quarter compared to the December 2018 quarter.
The report says growth was stable in the quarters ending March 2020, June 2020 and September 2020 due to the Covid-19 pandemic, the nationwide lockdown and the suspension of most activities business and lending in much of the country.
“However, there was a rebound in home loan origination in the quarter ending December 2020, leading to 4.52% growth in the portfolio outstanding,” the report notes.
The affordable housing segment (ticket size up to Rs 35 lakh) accounted for 90 percent of the market in volume and nearly 60 percent in value as of December 2020. In the affordable segment, loans amounting to Rs 15 lakh accounted for 70 percent. by volume and 38 percent by value.
According to the report, young borrowers and millennials (under 36), with high aspirations and commensurate disposable incomes, are increasingly seen as an attractive audience for home loans, with a 27% share in the annual arrangements during fiscal years 20-21. (until December 2020).
Public sector banks have retained the largest share of the home loan market in value and volume, with a share of nearly 45 percent over the past three years. As of December 2020, the top five public sector banks accounted for nearly 30% of the home loan portfolio by value, according to the report.
As of December 2020, the top five private banks accounted for 15% of the sector’s portfolio by value, according to the report.
Housing finance companies (HFCs) hold an overall market share of almost 37% in value. The top five HFCs (out of nearly 140) (including non-bank financial companies) as of December 2020 accounted for 27% of the pan-Indian home loan portfolio, he said.
The report further states that there is a steady increase in mortgage delinquency across all age groups of borrowers. Default rates are lowest in age groups over 45, followed by age groups 26 to 45.
“Default rates are highest in age groups under 25,” the report says.
The amount (in value terms) of overdue payments of over 90 DPD (days overdue) in the home loan portfolio stood at 2.49%, increasing across all note size segments, according to the report. .
In the affordable segment, loans under Rs 10 lakh have the highest delinquency amount at 4.44 percent, he said.
HFCs, including non-bank financial companies, have the highest defaults, largely due to stress in the book of notes below Rs 15 lakh, according to the report.