Leading financial institutions are seeing demand picking up for home loans and expect the momentum to gather pace in the festival season aided by the RBI’s latest announcement on rationalising the risk weights for all new housing advances until March 31, 2022 and linking them to the loan-to-value (LTV).

The new-home-loan market is showing some signs of recovery in the run-up to the festival season, though the commercial realty market is likely to remain subdued for some more time.

“For the quarter ended September 30, individual loan disbursements were at 95 per cent of the level in the corresponding previous period. Even our individual loan approvals grew sharply by 31 per cent year-on-year, which shows that new and fresh decisions are being taken by home buyers, thus reflecting their confidence,” said Renu Sud Karnad, Managing Director, HDFC Ltd.

Today, customers prefer properties that are ready or are nearing completion, and where the developer has a good reputation, she added. Siddhartha Mohanty, Managing Director & CEO of LIC Housing Finance Ltd, said the company is experiencing pre-Covid-level volumes in enquires.

“With normalcy gradually returning in August and September, our business also grew sequentially. We find a new optimism with builders offering lucrative deals. Properties are available at attractive price points. Home loan interest rates are at an all-time low. It is a buyers’ market and I can say that we are almost at pre-Covid levels,” he said.

Home sales

Home sales, by value, in the country rose 134 per cent to ₹29,731 crore in the September quarter from ₹12,694 crore in the preceding three-month period, according to Anarock Property Consultants data.

The Mumbai region reported a good increase in home sales as the Maharashtra government slashed the stamp duty rate and some developers made ‘zero stamp duty’ offers.

Buyer sentiment

“The results are visible in September figures from the registration offices in Maharashtra. Buyer sentiment has improved. While the conversion into actual sales is taking a tad longer, it’s happening,” said National Real Estate Development Council president, Niranjan Hiranandani, who is also Founder & MD of the Hiranandani Group.

HDFC sees demand coming from all over the country though it is largely from smaller cities/towns where property prices would typically be in the ₹25-40-lakh range. There is also demand for smaller apartments even in big cities like Mumbai, Delhi, Bangalore, Pune and Chennai.

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