Several reports have been highlighting a major slowdown in the real estate sector in India over the last financial year. However, the perceived slowdown in real estate may just be a myth since home loan disbursements have increased by a healthy 23% for 2016-17 as per available data from the National Housing Bank (NHB). Affordable housing is clearly witnessing a boom period since loans up to Rs.25 lakh contributed a whopping 76% for all disbursements.
According to NHB figures for 2016-17, home loan disbursement for loans less than Rs.25 lakh witnessed growth of 33% per as compared to the earlier financial year. However, a decline of 1% was observed in case of the number of home loan disbursements that were over Rs.25 lakh in value. However, this segment makes up just 1/4th of total home loans disbursed in the country.
The National Housing Bank (NHB) takes information from housing finance companies and public-sector banks, which disburse the majority of home loans in the country. The share of home loans exceeding Rs.25 lakh have come down to 24% from 30% in the previous year. This indicates that more customers preferred to take loans of smaller ticket sizes in comparison to 2015-16. 2016-17 also witnessed a huge increase of 48% in disbursement of loans up to Rs.2 lakh, which is pretty obvious, going by the Government’s emphasis on Housing for All by 2022 and affordable housing. Real estate companies also confirm this trend.
According to the Chairman of the Vatika Group, which is based in Gurgaon, Anil Bhalla, there is a major upside for homes, which are priced below the INR 1 crore mark. These buyers are majorly end-users and not speculators according to him. He added that this has been made clear through the occupation of 4, 500 out of the 6, 000 housing units delivered in one of the Group’s projects. He agreed that demand is very low for premium housing at present.