It also reveals that people belonging to the lower income groups are either struggling to get loan approvals or taking lesser loans.According to BankBazaar’s Home Loan Index, the growing demand from tier-2 and tier-3 centres is also ensuring that home loan as a financial instrument remains as a favourable tool for the common man.Not surprisingly, Bengaluru and Mumbai have been the top cities across these index parameters. The rising young population with high disposable income is nurturing the home loan market, as more people resort to home loan route for property purchase as well as tax benefits. Home loans in India have had a rollercoaster ride. Home loans are currently back in favour, and this is borne out by the movement of the BankBazaar Home Loan Index (HLI) in the preceding six to twelve months.The pulse of the home loan marketIndia, being a diverse financial market, has a home loan footprint that is as diverse as its constituent demographics.From the remainder of last year, an upbeat mood prevailed due to the falling interest rates and low inflation.While the Plastic Storage Box Mould For Refrigerator festive season and the New Year buzz have just faded in the retail sector, the party does not seem to end for home loan borrowers.Other statistics revealed by home loan indexThe average age of loan applicants in India is close to 34 years and the average monthly income of loan applicants is Rs 65,000.
The statistics offered by home loan index have revealed a hidden underbelly of the Indian home loan market.Things, however, have gradually become relatively rosier in the preceding 12 months, with an increase in affordable housing projects, dropping inflation, and lowering of interest rates making home loans more pocket-friendly.But with respect to the average ticket size of loans, cities are still on top.94 per cent in 2015, as compared to the higher rates in the aftermath of 2008.Borrowers getting tech-savvy for their financial needs and trying out new digital trends like mobile applications for loans are another finding, which shows convenience and on-the-move services will appeal to more and more users in the coming years. Major PSU banks and a few leading private banks in all have registered a strong demand from smaller centers helping the banks improve their home loan credit books. Demographic factors, like average income of residents in Bengaluru and Mumbai, as well as the fact that these two cities are the software and economic hubs of India respectively, makes it easier for loan applicants to apply for as well as get faster approval. The reasons for this trend can be higher property prices as well as applicants who can afford more loan. The top 10 cities in India contributed a higher chunk of the country’s home loan market, with close to 70 per cent of applications and disbursals. As an emerging trend, smaller cities and towns, including tier-2 and tier-3 cities, have gained substantial prominence in the home loan market. The home loan index at the end of December 2015 stood at 106 as compared to the reference value of 100 in April 2015, reflecting a reversal in consumer interest levels in the housing finance market. The BankBazaar HLI is an indicator that has been developed taking into account the diverse market trends of the Indian housing finance sector.Increasing home loan demandDuring the period between May 2015 and August 2015, the home loan marketin India as recorded by the index witnessed a dip below the 100-point mark, owing to high interest rates and the sluggish real estate market across India.This correlates with the dropping of interest rates, further to the RBI monetary reviews and lowering of bank base rate. The sluggishness in the Indian real estate sector, high inflation rates, high interest rates and the high levels of scrutiny of home loan borrowers after the 2008 crisis had lead to an overall dampening on the home loan market in the past few years.
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