Loan portfolios of housing finance companies grew at a slower clip in FY12 compared with the previous year because of tight liquidity conditions and higher borrowing costs.
As per National Housing Bank (NHB) data, loans outstanding on the books of 54 HFCs aggregated Rs 2,20,396 crore (as on March-end 2012), up 18 per cent over the March-end 2011 figure of Rs 1,86,438 crore.
Loans outstanding on HFCs books were up 22 per cent between March-end 2010 (Rs 1,53,189 crore) and March-end 2011. NHB is the regulator of housing finance companies.
According to Mr R.V. Verma, Chairman and Managing Director, NHB, FY12 was not an easy year for HFCs. Faced with tight liquidity conditions, rising cost of borrowings, and margin pressures, the companies had to compromise a little on growth. Public sector banks (PSBs), on the other hand, were able to sustain 18 per cent growth in their loan portfolios, given their access to low-cost savings bank and current account deposits.
Though full year data is not yet available for PSBs, Mr Verma said the numbers up to December showed that they were on track to achieving 18 per cent growth.
Housing loans on the books of 26 PSBs aggregated Rs 2,39,079 crore (as on March-end 2011), growing 18 per cent over the March 2010 figure of Rs 2,02,356 crore. The NHB chief observed that there was good appetite for loans from first-time home-buyers in Tier-II and Tier-III centres across the country as properties were affordable.
However, in the metros, demand has cooled as property prices are not adjusting downwards despite developers sitting on unsold inventory.
Mr Verma expects 18-20 per cent growth in home-loans in FY13. Given the inflationary pressure, he does not see an immediate thaw in home loan interest rates.
NHB is planning to launch a special refinance scheme for home loans up to Rs 5 lakh, which will be guaranteed by the proposed credit guarantee trust fund, said Mr Verma.
Once property developers realise that banks are game to lend to the common man without any hassles, given the availability of a loan guarantee from the fund, they will be encouraged to construct affordable dwelling units.