Home Loans Revive, Leaving Covid Scare Behind

People have started buying their dream home again after the Covid-19-induced lockdown and economic disruptions completely dried out new purchases.

Such has been the renewed customer interest in housing that builders are selling even tough-to-sell, non-vastu houses without offering much discount.

And the numbers are showing that the housing activity is again picking up the momentum. According to a report by Emkay Global Financial Services, systemic monthly mortgage disbursement in February has been at a high of Rs 75,000 crore as against Rs 40,000 crore on the average. This is mainly due to pent-up demand driven by benign rates, attractive property prices, low stamp duty and change in customer behaviour to house ownership or bigger house size.

Financial distributor Andromeda has clocked nearly Rs 2,100 crore  in disbursement in February – up 20 per cent over the last year – with home loans at Rs 1,250 crore or 60 per cent of disbursements.

After a dip in the first half of 2020-21, systemic retail loan growth trend remained healthy in the second half with a 9 per cent growth over the last year and 7 per cent year-to-date with mortgage rising 8 per cent year-on-year and 6 per cent year-to-date amid the festive cheer.

SBI led the pack with nearly 31 per cent market share in disbursements made in the mortgage segment, followed by the HDFC group at 19 per cent, ICICI at 13 per cent, Bank of Baroda at 9 per cent and Axis Bank at 7 per cent. Kotak has shown fresh aggression in line with the management's guidance with 3 per cent  market share in home loan disbursements in February.

“We expect overall retail credit growth to accelerate further (currently 9 per cent YoY vs 15 per cent  last year), led by mortgages (contributing 51 per cent  of retail loans) and back-end support by unsecured (Cards/PL) and vehicle loans,” the brokerage says.