HDFC Approves Rs 2 Trillion Retail Home Loans in FY22

India’s largest mortgage financier, HDFC Ltd, has so far approved retail home loans of Rs 2 trillion in FY22, signifying the huge demand for home loans in an otherwise subdued credit market. This is the highest home loan approval ever granted by the Mortgage Financier in a fiscal year.

Home loan interest rates may be at an all time low and are one of the main reasons why there is huge demand for home loans in the market from all lenders including public sector banks, private sector banks and housing finance companies compete to offer the cheapest rates in order to gain market share. The low interest rate is a consequence of the liquidity injected into the system by the central bank to deal with the coronavirus (Covid-19) pandemic.

Demand for home loans is driven by new homeowners as well as those looking to move up the property ladder. Geographically, the demand for mortgages comes from both metros and non-metros. And, looking at segments, demand is driven by affordable housing as well as high-end markets. The sweet spot for housing is still in the price range of Rs 50 lakh to Rs 1 crore, the lender said in a statement.

“In more than four and a half decades, I have not seen a better time for the housing sector than today due to lower interest rates, stable house prices, government’s push on affordable housing, improved affordability, favorable demographics, increasing urbanization and rising aspirations,” said Renu South Karnad, MD, HDFC Ltd.

“The government’s emphasis on housing is a recognition that a rapidly growing country like India with a large young population needs more houses at affordable prices, which would enable more households to become owners,” she said.

The lender said affordable housing will continue to drive India’s property sector. “The demand for affordable housing in India is extremely deep and resilient. With more developers moving into the medium and affordable segment by providing right-sized, right-priced units that are affordable to end users, the affordable residential real estate segment will continue to see strong traction,” HDFC said. ltd.

To increase its footprint in the affordable housing segment as well as smart and green housing, the lender has signed Memoranda of Understanding (MoU) with various entities, through which it raises funds, which will be directly deployed in these segments.

The central government has put in place programs such as the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) which has helped move towards the goal of housing for all. Karnad is of the opinion that the residential real estate segment will continue to see strong traction in the future, as the demand for housing is not just pent-up demand, but it is structural.

About 270,000 HDFC Ltd home loan customers have taken advantage of the benefits of the government’s CLSS scheme. The lender disbursed loans of Rs 45,914 crore under the CLSS scheme at the end of December, with the grant amount amounting to Rs 6,264 crore. In addition, for the nine months ended December 31, 2021, 30% of home loans approved by volume and 13% by value were granted to clients belonging to the Economically Weaker Section (EWS) and Low Income Groups (LIG). ).

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