The effect of the Government’s push for affordable housing and the Pradhan Mantri Awas Yojana (PMAY) interest subsidies can be felt with growth observed in home loans for the current fiscal year. Experts opine that this could be as much as 17-19% in the home loan category for FY2018-19. There is strong demand for home loans for budget properties and in the residential real estate segment in general.
According to experts, growth in the affordable housing category is propelling demand for home loans. Housing credit saw 16% of growth for FY2017-18 and overall penetration of mortgage went up to 10% for the very first time in this fiscal as compared to 9.5% as compared to FY2016-17. Overall housing credit increased by around 39% till March 2018 and this was majorly driven by new companies operating in the affordable housing category.
Overall mortgage penetration could increase by around 300 to 500 basis points over the next 4-5 years as per experts. Gross NPAs remained at 1.1% for housing finance companies for FY2017-18 which is better as compared to 1.2% of NPAs for December 2017. Overall NPAs in case of housing finance companies could touch anywhere between 1.2-1.5% overall and remain relatively on the lower side as per experts.