Banks Chasing More High-Value Customers For Home Loans - CRIF Insights
In a tepid real estate market, banks seem to be going for more high-value customers across the country. While India's home loan market has increased to Rs 19.3 lakh crore in FY19 from Rs 11.9 lakh crore four years ago, the number of borrowers has not.
Number of home loan borrowers fell to 26 crore in FY19 from 27.3 crore the previous year -- even as the average ticket size of loans taken has increased to Rs 20.76 lakh from Rs 19.68 lakh for the same period, according to data from credit bureau CRIF India.
A trend that shows banks are boosting their home loan book with relatively more high-value accounts and fewer customers. "Banks would be looking at top-line growth and boosting their loan portfolio -- so if the mid-market segment is doing well it is possible they are focusing on that," said Parijat Garg, senior vice-president, CRIF India.
While the all-India number for average ticket size is Rs 20.76 lakh -- there is a higher price point for metros like Mumbai (average ticket size of Rs 38.30 lakh) Bangalore (Rs 38.67 lakh) and Delhi (Rs 37.6 lakh).
Banks say that there is a sub-section among the new generation of salaried professionals to whom the ticket size of Rs 35-50 lakh is most attractive. "A Rs 50 lakh flat -- immediately has associations of a gated community, possibly a pool, security, gym, sauna and other facilities. Sometimes it could be just a 2BHK and not a 3BHK, but young high-earners would like to pay for the ambiance and convenience -- a show statement," said Abhijit Mazumder, CGM, SBI.
Mid-market and affordable housing are among the better-moving segment says real estate observers. "The initial agony of policy overhauls like RERA and GST has faded, leaving in its wake a reluctantly more transparent and efficient real estate market environment. So we are seeing higher sales in mid-market and affordable housing – both from supply and demand side which leads us to believe that it would be a key driver for residential sector in coming times. Consumer demand has been lacking momentum especially in premium and luxury residential segments," said Shishir Baijal, chairman and managing director, Knight Frank India.