Home loans could gain momentum as consumers dare to dream “big”


Home loans are expected to see a sharp increase in disbursements this festival season, given offers from banks and housing finance companies, as well as demand from consumers, many of whom are looking to move to a larger home amidst the downturns. work from home demands, or are simply keen on buying a second home.

While lenders say demand for home loans continues with lower defaults than other segments, real estate players have also reported an increase in home purchases.

“Now is a good time to buy a house because the rates are very low and people have realized the importance of having their own house during the pandemic. Real estate prices have remained largely stable. Plus, for most people, pay cuts have been reinstated and the outlook is optimistic, ”said an HFC executive.

Intense competition

There is also intense competition in the industry, with banks such as Kotak Mahindra Bank, State Bank of India, Punjab National Bank as well as HFCs like HDFC and LIC Housing Finance announcing special mortgage rates for the festival period.

“Following the easing of containment since June 2021, growth in bank credit is gradually improving. This should be supported by rate cuts by banks to boost credit, as several banks are offering loans at record interest rates ahead of festival season, ”CARE Ratings said in a recent report, adding that it is expected to improve further, led by the retail segment with the onset of festival season.

Home sales rose 113% in the July-September period to 62,800 units in seven major cities, from 29,520 a year ago, thanks to better demand for mortgage rates, according to real estate consultant Anarock. low and new hires in the IT / ITeS sector.

Residential property sales amounted to 24,560 units in the second quarter of the year.

“In the third quarter, job security improved dramatically and strong hires in the IT / ITeS and financial sectors were supported by record mortgage rates and a growing sense of home ownership. The current culture of the WFH continues to influence residential sentiment on two major fronts: aggregate housing demand and unit size, ”said Anuj Puri, chairman of Anarock Group.

New launches increase

New launches in the top seven cities increased 98% year-on-year to 64,560 units in the third quarter of this fiscal year, from 32,530 units a year ago. JLL’s Homebuyer Preference Survey 2021 of 2,500 potential buyers also found that over 80% of respondents plan to make a purchase within the next three months.

“If the impending wave of Covid-19 can be contained and consumer sentiment improves further with the holiday season, the industry is expected to experience a healthy recovery in the second half of 2021. New launches are expected to increase in the second half of 2021 because developers are launching new projects to monetize their land reserves, ”said Samantak Das, chief economist and head of research and REIS (India), JLL.

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