India’s largest mortgage financier, HDFC Ltd, has approved retail home loans to the tune of Rs 2 trillion in FY22 so far, signifying the huge demand for home loans in an otherwise subdued credit market. This is the highest ever home loan approval by the mortgage financier in a financial year. Interest rates for housing loans are, perhaps, at the lowest levels they have ever been and are one of the key reasons why there is a huge demand for housing loans in the market with all lenders, including public sector banks, private sector banks, and housing finance companies competing to offer the cheapest rates to gain market share.
The low interest rate is a consequence of the liquidity injected into the system by the central bank to tide over the coronavirus (Covid-19) pandemic. The demand for housing loans is being driven by first time homeowners as well as by those who are looking to move up the property ladder. Geographically, the demand for housing loans is coming both from metros and non-metros. And, if one were to look at the segments, demand is being driven by affordable housing as well as high-end markets. The sweet spot for housing is still in the price range of Rs 50 lakh to Rs 1 crore, the lender said in a statement.
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