Housing loan market grows by 9.6% in December quarter: Report

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 percent 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 percent share over the last three years. As of December 2020, the top five public sector banks constituted nearly 30 percent of the housing loan industry book by value, the report said.

As of December 2020, the top five private banks constituted 15 percent of the industry book by value, the report said. Housing finance companies (HFCs) command an overall market share of nearly 37 percent by value. The top five (out of the nearly 140) HFCs (including non-banking financial companies) as of December 2020 constituted 27 percent of the pan-India housing loan book, it said.

The report further said there is a steady increase in housing loan delinquency across borrower age groups. Default rates are lowest in above 45 year age groups followed by 26-45 year age groups. ”Default rates are highest in less than 25 year age groups,” the report said.

Amount (in value terms) delinquencies by 90+ DPD (days past due) in housing loan book stood at 2.49 percent having increased across all segments of ticket sizes, the report said. Within the affordable segment, less than Rs 10 lakh ticket size loans have the largest amount of delinquency at 4.44 percent, it said.

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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.