India: Total Housing Loan Outstanding Rs. Rs. 6,00,000 Crore

Indian real estate sector may be crying wolf over home loan high interest rates.But outstanding housing loans show steady growth.

Total loan outstanding for  HFCs (Housing Finance Companies) was Rs 2,72,000 crore as on March 31, 2012 With the RBI continuing its war against inflation, chances of rate cuts during the year.

For SBI, housing loans constituted 57% of its retail book at of the end of the June quarter (2012)

Growth Rs.1,05,550 Crore..!

The Indian real estate industry has been crying wolf over the shortage of funds on account of a liquidity crisis among their customers. But data on outstanding housing loans of banks and HFCs show a growth of Rs. 1,05,550 crore over the last 12 month.

Admittedly, over the last year (2011), higher home loan interest rates & rising property and plot of land prices have hit the pace of loan growth, causing almost a 2%t reduction in growth.

According to data from the RBI (Reserve Bank of India), total housing loan outstanding (including priority sector housing) for banks was Rs. 4,13,380 crore as on June 29, up from Rs. 3,58,830 crore as on June 17, 2011, a growth of 15.2 per cent.

Over the period, this amounted to an incremental growth of Rs. 54,550 crore for the residential real estate market alone. During June 18, 2010 - June 17, 2011 period, the growth in outstanding housing loans was 17%.

According to rating agency ICRA, total loan outstanding for HFCs was Rs. 2,72,000 crore as on March 31, 2012 compared with Rs. 2,21,000 crore as of March 31, 2011, showing an incremental growth of Rs 51,000 crore, or 23%.

Ms. Vibha Batra, VP, ICRA, said, ''The retail home loan market - combining HFCs and Banks at Rs. 6,00,000 crore as of March-end. Banks have a market share of 68% in home loans,  32% in  is held by HFCs"

Housing Development Finance Corporation..!

For the year ended March 31, 2012 HDFC (Housing Development Finance Corporation) alone had disbursed loans worth Rs. 71,113 crore, out of which 66% or Rs. 47,000 crore was retail home loans. The mortgage lender's loan outstanding as of March 31, 2012 has moved up from Rs. 1,17,126 crore as of March 31, 2011 to Rs. 1,40,874 crore as of March 31.

The figures seem to suggest that the liquidity crunch being faced by the industry is more a result of its own making with bad cash flow planning than banks and HFCs turning off the lending tap for individual customers.

State Bank of India..!

In fact, faced with a slowdown in corporate loans, banks are focusing on growing their retail businesses, especially housing loans. To pep up demand, the India's largest lender SBI (State Bank of India) cut interest rates on home loans by 0.5% to 0.85%.

The reduced rates are only for new customers, while old customers, who wish to get the benefit of these new rates, will have to pay a fee of one 1% of their outstanding loan to move over to the new scheme.

With the RBI continuing its war against inflation, chances of rate cuts during the year appear to be slim. The most affected in this case will be the old home loan borrowers for whom lending rates have not fallen and who are being hit by high inflation and a freeze on wage hikes that have crimped disposable real income. However, for new customers, banks have selectively lowered rates to pep up growth in their loan books.

For SBI, housing loans constituted 57% of its retail book at of the end of the June quarter, 2012 The total housing loan advances of the India's's largest bank stood at Rs. 1,05,383 crore as of June, 2012 up from Rs. 93,225 r crore as on June 2011, a growth of 13.04%.

With the prepayment penalty abolished, housing loan customers of other banks may switch to SBI as we are offering lower rates.

ICICI Bank..!

For ICICI Bank, 34% of its total advances of Rs. 2,68,430 crore consists of retail book for the quarter ended June 30. 2012. Out of the retail book of Rs. 91,266.20 crore, 65% consists of housing loans.

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