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LIC Housing Finance sees bright prospects to record double-digit growth this fiscal, supported by the return of home loan growth to pre-Covid-19 levels, government push, revival in affordable housing segment, and its new products and support measures.
“As of now, sentiments are improving day by day. We expect a positive rub-off in the realty space, with the overall economy opening in phases. A big chunk of an upwardly mobile middle-class segment, urbanisation rates, and the emerging concept of work from home will be able to sustain the demand. At the current rate, we can look forward to a double-digit growth towards the end of the current financial year,” Siddhartha Mohanty, MD and CEO of LIC Housing Finance, told BusinessLine .
A buyers’ market
He is of the view that people with stable earnings have not been impacted greatly, and are looking to cash in on this opportunity – it is a buyers’ market.
Affordable housing has seen the fastest recovery post-pandemic due to the inherent demand and sops given by the government under PMAY CLSS in the form of subsidy.
“PMAY CLSS (Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme) is a major driver of home loans today in the sector. For LICHFL, around 47 per cent of our business by value is from the Top 7 metros, while the rest is from other centres. PMAY constitutes nearly 30 per cent of our business,” said Mohanty.
Meanwhile, its product Griha Varishtha, which caters to individuals covered under defined pension benefits, appears to be receiving good response. Close to ₹1,000 crore has already been sanctioned under the scheme since its introduction in July.
“This is a unique product as of now in the market that offers loan tenure of up to 80 years of age. Apart from this, our innovative product offerings like 2020 Home loan Offer that gives 6 EMI waivers for borrowers opting for ready-to-move-in homes and 48 months principal repayment moratorium for under-construction projects are also gaining traction, he said.
Effective October 1, the company waived off processing fee as a special festive offer, which is sure to enthuse buying activity.
LIC Housing has seen a rebound in the mid-segment also owing to the demand for large spaces. The company is seeing potential buyers taking the plunge on the back of property prices bottoming out.
The company seeks to continue its focus on its core strength area – retail home loans to individuals – and expects a double-digit growth in the coming two quarters.
Luxury segment or high-value loans could see a revival especially after the recent announcement by the RBI to rationalise risk weight on individual housing loan by linking it to LTV, said Mohanty.
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