The share of ‘housing loans’ in bank credit has increased to 14.4 per cent in June 2022 from 13.1 per cent in March 2020, and housing contributes around 50 per cent of the personal and retail loans, according to a report by SBI. It added that the share of ‘retail credit/personal loans’ in overall bank credit has jumped to 29.1 per cent in June 2022 from 26.2 per cent in March 2020.
“Post COVID-19, working from home has emerged as a dominant trend that is redefining the mortgage loan demand for the household sector. Our study on district wise home loan portfolio (outstanding) for ASCBs (juxtaposing SBI & ASCB results by using market share, trends and benchmarking) shows that total portfolio grew by more than 10% in FY22, with districts in tier 3 and tier 4 areas growing at a much faster rate than tier 1 and tier 2 districts post-pandemic,” SBI Research said in a report titled ‘Special Report on Emerging Trends in Residential Housing’. ASCBs stand for all scheduled commercial banks.
It added that housing prices have increased significantly in percentage terms in tier 3 and tier 4 cities than in major cities over the last year. The combined share of tier 3 and tier 4 districts in fresh disbursement, though small, has also been growing steadily over the years. It has now grown to 36 per cent in FY22 compared to 32 per cent in FY19. Average ticket size has increased much more in Tier 3 (1.3 times) and Tier 4 (1.4 times) districts as compared to Tier 1 (1.1 times) and 2 (1 times) districts between FY22 and FY19.
“Furthermore, number of female borrowers in new disbursement increased significantly in FY22 in tier 3 and tier 4 districts. Among the top-20 districts with highest share of female borrowers in fresh home loan disbursal in FY22 (which are mostly rural), 6 districts are from Chhattisgarh and 3 from Gujarat and Haryana each,” the SBI report said.
It added that among the 124 aspirational districts, the performance of some of the districts in fresh home loans is quite impressive. In 76 districts (60 per cent of total aspirational), compound annual growth rate (FY22 over FY18) of fresh disbursements was more than 10 per cent.
“This rising home loan demand in rural districts can be attributed to the SVAMITVA scheme providing rural people with the right to document their residential properties which can then help them to use their property for economic purpose. Haryana and Uttar Pradesh, where this scheme has already covered many villages, have more districts where home loan disbursal is increasing at a faster pace,” the report said.
The SVAMITVA scheme, under the Ministry of Panchayati Raj, aims to provide the rural people with the right to document their residential properties. It was launched in April 2021.
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