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

The housing loan market in the country witnessed a rebound and registered a year-on-year growth of 9.6 per cent in terms of portfolio outstanding (PoS) in the third quarter of FY2021, despite the COVID-19 pandemic, says a report.

The portfolio outstanding of the sector stood at ₹22.26 lakh crore as of December 2020, as compared to ₹20.31 lakh crore as of December 2019, according to a quarterly report released by credit information bureau CRIF High Mark.

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

The report said the growth was flat in quarters ending March 2020, June 2020 and September 2020 due to COVID-19 pandemic, the resulting nationwide lockdown and suspension of most of the business and lending activities in large parts of the country.

"However, there has been a rebound in housing loan originations in the quarter ending December 2020, leading to 4.52 per cent growth in portfolio outstanding," the report noted.

Affordable housing segment (ticket size up to ₹35 lakh) constituted 90 per cent of the market by volume and nearly 60 per cent by value as of December 2020. Within the affordable segment, loans under ticket size of ₹15 lakh comprised 70 per cent by volume and 38 per cent 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 per cent 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 per cent share over the last three years. As of December 2020, the top five public sector banks constituted nearly 30 per cent of the housing loan industry book by value, the report said.

As of December 2020, 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 per cent by value. The top five (out of the nearly 140) HFCs (including non-banking financial companies) as of December 2020 constituted 27 per cent 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 ₹10 lakh ticket size loans have the largest amount of delinquency at 4.44%, it said.

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