News: ‘Active home loan borrower base grew 5% by December 2020 from year ago’-20-05-2021

With rising demand for home loans, the country’s active housing loan borrower base as of December 2020 was higher than the pre-pandemic levels of December 2019, with growth of nearly five per cent.

According to the CRIF CreditScape: Housing Loans report, the total number of housing loan borrowers was 2.32 crore as on December 2020, of which 1.43 crore were active borrowers. In contrast, the total home loan borrowers as on December 2019 was 2.16 crore, of which 1.36 crore were active borrowers.

“The housing loan sector, after witnessing a setback in the first quarter of 2020-21 in terms of originations, bounced back in the second and third quarter of 2020-21, ending the year with 9.6 per cent growth in portfolio outstanding compared to 10.4 per cent growth in the previous year,” said the report.

The third quarter of last fiscal witnessed 28 per cent quarter-on-quarter growth in disbursements compared to six per cent growth in the same period in 2019-20.

Vipul Jain, Head of Products, CRIF High Mark, said housing loans sourcing witnessed strong growth in the third and fourth quarter of 2020.

“Almost 50 per cent of all loans sourced in the year were in the last three months of 2020. Pent-up demand, lower interest rates, favourable government incentives and discounts from developers, helped in the sector’s growth,” he said.

Affordable housing with loans up to Rs 35 lakh contributed to 82 per cent of sourcing volumes, with growth driven by Tier-II and Tier-III cities.

The report also revealed that Mumbai, Delhi NCR and Bengaluru are the top three housing loan markets even though Mumbai and Delhi displayed high delinquencies as of December 2020.

“Tier-II and III geographies have a higher annual growth rate in the housing loan book compared to the metros, with a large part of the growth coming in from the affordable and mid-market segment,” it further said.