The average ticket size of the loans given by housing finance companies has risen to ₹14.8 lakh in 2022 from ₹12.9 in 2019, led by an increase in real estate prices and improved demand from the above ₹15 lakh segment.

“Post pandemic, HFCs have mainly focused on higher ticket sizes for new disbursements with average ticket size of ₹42 lakh for Q1FY23 exceeding the ₹36 lakh ticket size pre-pandemic in 2020,” as per a ÇII-KPMG report titled ‘Role of NBFCs and HFCs in driving sustainable GDP growth in India’.

Further, in disbursements of up to ₹25 lakh, the share of volume of loans less than ₹15 lakh increased from 55 per cent in 2019 to 69 per cent in Q1FY23.

In the LAP (loan against property) segment, HFCs have been focussing on loans below ₹10 lakh, with their share in new disbursements increasing from 23 per cent in 2019 to around 34 per cent in Q1FY23. In value terms, the share remained flat around 17 per cent, further signaling focus of HFCs on micro LAP with reduced ticket sizes, the report said.

“In affordable housing segment with ticket size less than ₹15 lakh, HFCs have maintained a wait and watch stance in order to see the full recovery in MSME/self-employed segment in urban and semi-urban areas,” it added.

Housing finance market

Per the report, the housing finance market is expected to grow at a CAGR (compounded annual growth rate) of 20.58 per cent from FY22 to FY31 owing to affordable housing, decrease in property prices, attractive tax incentives and a surge in household income.

This has been primarily driven by increasing focus on home ownership by millennials owing to work from home and ultimately higher demand from tier-II and tier-III cities, increase in number of nuclear families, growing disposable income and fiscal incentives including reduction in stamp duty and interest rate cuts on home loans.

“The home loan market is expected to double in the next five years with 70 per cent of home loans potentially be less than the ticket size of Rs 50 lakh,” it said, adding that post the pandemic, the home loan portfolio grew 10 per cent with faster growth from tier-III and tier-IV towns as compared with tier-I and tier-II cities.

Total outstanding loans by HFCs stood at ₹7.31 lakh crore in 2019, with an average ticket size of ₹14-16 lakh over the last 5 year. This is expected to reach ₹9.1 lakh crore in 2023, depicting a 24.1 per cent growth, the report said