The substantial loan growth projections of non-banking financial companies and housing finance companies for the current financial year (FY’23) paints a promising picture for residential real estate.
According to India Ratings and Research , NBFCS are likely to report 14% loan growth in FY23. The agency puts the loan growth of NBFCs in FY 22 at 7 percent to 8 percent. This is because of the post-covid trend reversal. While during the pandemic unsecured business loans saw higher demand, this financial year, housing loans could well see a spike in demand. What would be driving the housing loan funding will be sufficient capital buffets, stable margins and sizable on-balance sheet provisioning and liquidity in the system. Apart from NBFCs, HFCs will also witness substantial loan growth. As per India Ratings ‘projections, HFCs are likely to grow 13 percent on the back of geographical penetration and possible rise in loan ticket size.
The promising loan growth will be aided by the continuous low interest rates. Notwithstanding inflation, home loan interest rates may only rise marginally. This will in turn give a push to housing sales. momentum.The housing sales across top 8 cities this year, are expected to rise by about 20 percent. This, according to global property consultancy, Knight Frank India,may well result in 5 percent capital value growth for the residential realty.Affordable Housing