Loan accounts double, but amount disbursed takes a nosedive during January-June 2010
The average home loan amount in Gujarat has fallen. During January-June 2010, the average size of home loan amount has witnessed a fall of about 52% when compared to that in the same period in 2009.
Bankers and developers say this fall can be attributed to two factors: increasing demand for affordable houses, which decreases the amount of loan; and the factor of cash component that has been introduced by some developers.
As per State Level Bankers’ Committee (SLBC) quarterly reports, in the first six months of 2009, home loans worth Rs2,004 crore were disbursed to 16,436 accounts in Gujarat. During this period, the average housing loan per account stood at around Rs12.19 lakh.
But during January-June 2010, home loans worth Rs1,886 crore were disbursed to 32,887 accounts. This brought down the average loan amount to Rs5.73 lakh per house, thereby making a fall of 52%.
Though the number of new home loan accounts doubled during January-June 2010 compared to that in the same period in 2009, the total amount of loan disbursed has fallen, leading to a fall in the size of average home loan.
Does this mean that people of Gujarat have more liquidity to buy homes? Or is cash component in realty deals increasing? Or is increasing demand for affordable houses bringing down the loan size?
According to chairman and managing director of Dena Bank, DL Rawal, who was in the city recently, the demand for affordable houses is rising which in turn bringing down the loan size.
“In tier II and III cities, the demand for affordable houses is increasing. With scarce land available, builders are developing houses in sub-urban areas where the cost of the house may be less than Rs6 lakh in a city like Ahmedabad,” said Rawal.
Head a public sector bank for Gujarat region said on the condition of anonymity that the percentage of cash component in realty deals has increased recently.
“There are many such cases in which customers had bought houses without zero percent of loan. Even in cases of flats, the developers are demanding around 15% of cash component and so the size of home loan fell,” said the official.
But developers say otherwise. Vijay Shah, a city-based developer, said that due to rise in sales of affordable houses, the average size of home loan has fallen. “In case of Ahmedabad, the eastern part of the city has witnessed huge demand in affordable houses of 1BHK costing less than Rs5 lakh. Because of this, the average home loan size has fallen,” said Shah.
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