CRIF High Mark: Creditscape: Home loans.
CRIF High Mark, one of the leading credit bureaus in India has released the CRIF CreditScape: Housing Loans. It provides razor sharp insights on the home loans space and notable trends across geographies and yearly data points on the same until December 2020. Please find enclosed the report for your perusal.
Some of the key trends that emerge from this study are:
Housing Loans Market has grown at 3-Year CAGR of 6.5%:
HL Industry witnessed 10.4% growth in Portfolio outstanding (PoS) in Dec'19 over Dec'18. Growth in Dec'20 over Dec'19 was 9.6% despite Covid19 pandemic. The recovery is largely due to huge rebound in originations in Q3 FY 2020-21.
Q3 FY 2020-21 witnessed 28% Q-o-Q growth in disbursements compared to 6% in Q3 FY 2019-20 (pre-Covid 19 level). Industry experts believe that Q4 FY 2020-21 is also expected to end on a positive note with disbursements showing tremendous growth.
Active housing loan borrowers base as of Dec 2020 stand higher than pre pandemic levels in Dec 2019, Y-o-Y growth of nearly 5%
Affordable Housing Segment constitutes 60% of the market by value and nearly 90% by volume as of Dec 2020:
Affordable Housing Segment (Ticket Size up to ₹35 Lakh) constitutes 90% of the market by volume and nearly 60% by value as of Dec 2020
Within the affordable segment, volume growth in loans of 15L-35L over the last 4-5 years, coupled with increasing share in overall originations across Rural, Semi Urban and Urban segments indicate shifting preferences of buyers towards higher ticket sizes
Steep recovery in Q2 and Q3 FY 2020-21, with around 80% of the demand (volume) coming in from the affordable segment
Rural Housing demand for mid-range and higher ticket sizes has continued to increase over the last 5 years
Young borrowers and millennials:
Young borrowers and millennials (<36 years), with high aspirations and commensurate disposable incomes are increasingly being seen as an attractive audience for housing loans, with a share of 27% in the annual originations in FY 20-21 (till Dec 2020).
Average ticket size of home loans given to millennials and young borrowers has continued to increase over the last 5 years, with a CAGR of 6.2%.
Public Sector Banks have retained the largest market share in housing loans
Public sector banks are the largest players in terms of value and volume with a near 45% share over the last 3 years, dominating affordable and mid-range segments.
Private banks have a relatively smaller share of 17% by value. As of Dec 2020, top 5 private banks constitute 15% of HL Industry book by value.
HFCs have an overall market share of nearly 37% by value. The top 5 (out of the nearly 140) HFCs (Incl. NBFCs) as of Dec 2020 constitute 27% of the Pan India HL book.
Geographical distribution:
Mumbai, Delhi NCR, Bangalore are Top 3 HL markets. Mumbai and Delhi display high delinquencies as of Dec 2020.
Tier II and III geographies have a higher annual growth rate in HL book compared to metros with a large part of the growth coming in from affordable and mid-market segment.
As of Dec 2020, within Tier II cities, the top 10 cities by portfolio size constitute 37% of the Tier II market, Surat is the largest market in Tier II.
Vishakhapatnam and Coimbatore among the top 10 cities, have the largest Y-o-Y growth of over 10% as of Dec 2020. Vishakhapatnam has reported improving amount delinquencies (90+ DPD) by 11bps over the previous year while Coimbatore saw a jump of only 13 bps.
Lucknow and Coimbatore are states reporting the highest average ticket size of HL at 18.03 lakh and 17.17 lakh respectively.
Quote by Vipul Jain, Head of Products, CRIF High Mark: Housing Loans sourcing witnessed strong growth in Q3 and Q4 of 2020. Almost 50% of all loans sourced in the year was in the last three months of 2020. Pent-up demand, lower interest rates, favorable government incentives and discounts from developers, helped in the sector’s growth. Home Loan lenders continue to be bullish about this sector. Affordable Housing (loans up to Rs. 35 lacs) contributed to 82% of sourcing volumes with growth driven by Tier II and Tier III cities.
