Housing Finance Companies: Home Loan Market Grows 9.6% in December Quarter: Report
The industry saw a 10.4% growth in outlets in the December 2019 quarter compared to the December 2018 quarter.
The report indicates that growth was flat in the quarters ending March 2020, June 2020 and September 2020 due to the Covid-19 pandemic, the resulting national lockdown and the suspension of most activities. business and lending in large parts of the country.
“However, there was a rebound in housing loans in the quarter ending December 2020, leading to a 4.52% growth in portfolio outstanding,” the report noted.
The affordable housing segment (ticket size up to Rs 35 lakh) constituted 90% of the market by volume and almost 60% by value as of December 2020. In the affordable segment, loans below Rs 15 lakh accounted for 70% in volume and 38% in 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 fixtures in fiscal year 20-21. (until December 2020).
Public sector banks have retained the largest housing loan market share by value and volume, with a share of nearly 45% over the past three years. As of December 2020, the top five public sector banks accounted for almost 30% of the housing loan industry’s 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% by value. The top five (out of nearly 140) HFCs (including non-bank financial companies) as of December 2020 accounted for 27% of the pan-India housing loan portfolio, he said.
The report further indicates that there is a steady increase in delinquencies on home loans across all age groups of borrowers. Drop-out rates are lowest in age groups over 45, followed by age groups 26-45.
“Default rates are highest in age groups under 25,” the report said.
The amount (by value) of defaults over 90 DPD (days past due) in the home loan portfolio was 2.49%, having increased across all note size segments, according to the report. .
In the affordable segment, loans under Rs 10 lakh have the highest number of defaults at 4.44%, he said.
HFCs, including non-banking financial companies, have the highest delinquencies, largely due to stress in the book of less than Rs 15 lakh notes, according to the report.