October Home Loan Disbursals Second Highest In HDFC History, Says Keki Mistry

03 Nov 2020

October Home Loan Disbursals Second Highest In HDFC History, Says Keki Mistry

Demand for home loans, which improved in the July-September quarter, held up well even in October. In fact, the country’s largest home financier HDFC Ltd., saw the second-highest monthly disbursements in history, according to Vice Chairman and Managing Director Keki Mistry.

There are three reasons for this, Mistry explained in an interview with BloombergQuint.

•Home loan rates are at historically low levels and are unlikely to come down further.
•Some state governments like Maharashtra have lowered stamp duty charges.
•Some of the pent up demand for home purchases from the initial parts of the lockdown, is returning now.

These factors, according to Mistry, make it a good time to buy a house. Real estate developers and customers are also realising this, which has led to an improvement in demand on the ground.

“In these pandemic times, if a person visits a site, it is someone who is definitely interested in buying the property. They (developers) would try to close the deal by giving them 3-5% discounts to the listed price,” Mistry said.

For the July-September quarter, HDFC saw individual loan application rise 12% and approvals were up 9% compared to the year-ago quarter. Demand saw a bump up thereafter. Approvals for the month of October were up 58% as compared with the same period last year, while disbursals were up 35%.

Some part of this is due to weaker demand in October last year, said Mistry. Even so, the pick-up has been strong.

The disbursals in October rose 35% from last year. But last year, October was weak due to reasons like Diwali being in November. If you were to look at total approvals between October-December last year and take an average monthly disbursal, then this year the rise was 22% [in October]. But this is on a very large base so even 22% is very high.

We would hope that this momentum continues. The structural demand for housing will always been strong. It may go up one quarter and come down in another. But if you take three- to five-year view, I would continue to say that the demand for housing will remain strong.