Housing loan market rebounds with 9.6% growth; loan delinquencies on the rise

News:

MAS Team | 22 May 2021

The housing loan market in the country witnessed a rebound and registered a year-on-year growth of 9.6% in terms of portfolio outstanding (PoS) in the third quarter of FY2021, despite the Covid-19 pandemic, according to a quarterly report released by credit information bureau CRIF High Mark.

The portfolio outstanding of the sector stood at Rs 22.26 lakh crore as of December 2020, as compared to Rs 20.31 lakh crore as of December 2019, writes The Economic Times.

The industry had witnessed 10.4% growth in PoS in December 2019 quarter over December 2018 quarter.

Affordable housing segment (ticket size up to Rs 35 lakh) constituted 90% of the market by volume and nearly 60% by value as of December 2020. Within the affordable segment, loans under ticket size of Rs 15 lakh comprised 70% by volume and 38% by value.

According to the report, young borrowers and millennials (less than 36 years), with high aspirations and commensurate disposable incomes are increasingly being seen as an attractive audience for housing loans, with a share of 27% in the annual originations in FY20-21 (till December 2020).

Public sector banks have retained the largest market share in housing loans by value and volume, with a near 45% share over the last three years. As of December 2020, the top five public sector banks constituted nearly 30% of the housing loan industry book by value, the report said.

The report further said there is a steady increase in housing loan delinquency across borrower age groups. Default rates are highest in less than 25 year age groups.

Within the affordable segment, less than Rs 10 lakh ticket size loans have the largest amount of delinquency at 4.44 per cent, it said.

HFCs, including non-banking financial companies, have the highest delinquencies, largely due to the stress in the less than Rs 15 lakh ticket size book, the report said.

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