The latest report by the State Level Bankers’ Committee (SLBC) – Gujarat suggests that home loan disbursals stood at Rs 18,967 crore during the December quarter of FY 2024, an increase of 71% compared to Rs 11,166 crore in the corresponding period last year.This is the highest disbursal that in the past five years i.e. since FY 2020.
Bankers attribute the rise in disbursals to the growing demand for residential real estate coupled with the merger of HDFC and HDFC Bank, which has augmented the housing finance portfolio consistently over three quarters.
“The demand for new homes is definitely good. It is not only a good form of investment but also a tax saving option. Young professionals who are earning well are certainly investing in buying their own homes. These are among the key factors propelling the rise in housing finance disbursals. Meanwhile, the merger of HDFC and HDFC Bank has added a fresh chunk of portfolio of disbursals as is reflected in the past three quarters,” said a senior official from SLBC Gujarat, requesting anonymity.
In a recent update on its home loan business in India, HDFC Bank said, “The bank’s market share has grown approximately by 18% to 20% on incremental disbursals after the merger. It has exhibited robust and consistent higher double-digit, year-on-year growth across its home loan business for the first six months after the merger. The growth in sales turnover has come on the back of a wider distribution network.”
The number of home loan takers has also gone up from 1.29 lakh in the third quarter of FY 2023 to 2.16 lakh in the corresponding quarter this fiscal, an increase of 67%.
Real estate sector experts attribute the growth to a bullish sentiment and good demand for premium segment products.
Balbir Singh Khalsa, executive director, Knight Frank India, said, “Primary sales in Ahmedabad have doubled in the past two years along with a steady increase in prices. Home loans are a major source of homebuyer financing and this substantial growth in disbursals is in line with the home buyer interest/activity seen in the market. Further, sales growth in the premium segment products or higher value apartments has been driving market volumes and is consequently boosting bank disbursals further.”
Echoing a similar view, Dhruv Patel, president, Credai Ahmedabad, said, “The demand for residential real estate is positive and will continue over the coming few quarters. In the wake of demand, even supply of new schemes is good. Both premium segments as well as affordable homes are in good demand.”
Experts also project a well-sustained demand through 2024. “Homebuyer interest continues to remain strong and should be able to sustain the demand in 2024 especially as inflation eases and with interest rates expected to taper off and possibly reduce during the year,” said an industry expert.