Sky high prices have not deterred buyers from investing in one of life’s most prized possessions — a house. At least that is what data suggests based on the latest quarterly results of the country’s top housing finance companies.

The companies, whose primary business is to raise money and lend to people for buying residential units, reported double digit growth in their second quarter net profit. Housing Development Finance Corporation (HDFC), the country’s largest standalone housing finance company, saw its net profit grow 10 per cent in the three months ended September 30 over the corresponding year-ago period.

Its peers, LIC Housing Finance Corporation and Indiabulls Housing Finance Ltd, added 28 per cent and 22 per cent, respectively, to their bottom line.

The demand, according to the captains of these finance companies, has been coming from the outskirts of Tier-I cities and from Tier-II and Tier-III centres as well.

Loan value

These housing finance companies have an average loan value of less than Rs 30 lakh. There is robust demand for dwelling units in the Rs 40-50 lakh segment.

Ironically, however, this is also one of the segments where there is still some shortage of units. But the shortage is not as bad as in the lower-income segment.

Apart from first-time buyers, investors are also buying into the brick and mortar segment to grow their money. With fewer “viable” avenues of investment left in the financial segment, investors are looking to park their money in apartments, especially in Tier-II and Tier-III cities.

According to industry captains, demand generally picks up in the second half of a fiscal. They expect Tier-II and Tier-III centres to drive growth of HFCs in the near term.

> satyanarayan.iyer@thehindu.co.in

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