Home loan market grows 9.6% in December quarter: report

Bombay: The home loan market in the country has rebounded and recorded 9.6% annual growth in outstanding portfolio (PoS) in the third quarter of fiscal 2021, despite the COVID-19 pandemic , according to a report.

The sector’s portfolio outstanding amounts to ??22.26 lakh crore in December 2020, compared to ??20.31 lakh crore as of December 2019, according to a quarterly report released by the credit bureau CRIF High Mark.

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 during the quarter ending December 2020, leading to 4.52% growth in the portfolio outstanding,” the report notes.

Affordable housing segment (ticket size up to ??35 lakh) constituted 90% of the market in volume and nearly 60% in value in December 2020. In the affordable segment, loans of less than ??15 lakh comprised 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 mortgage loans. 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 among 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 DPD 90 (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, less than ??The 10 lakh note size loans have the highest delinquency amount at 4.44%, he said.

HFCs, including nonbank financial companies, have the highest defaults, largely due to the stress in the minus ??15 lakh banknote size book, according to the report.

This story was posted from an agency feed with no text editing.

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Priscilla C. Carnegie