With an increase in the demand and supply of housing projects in the country, the housing finance sector is set to see higher growth in the next few years. As on last June 30, 2013 the total housing credit outstanding in India was over Rs 7.99 lakh crore, against Rs 7.59 lakh crore on March 31, 2013.
That is an annualised growth rate of 21 per cent, against 18 per cent in 2012-13. Although, there was a slight decline in net interest margins and stability on the non-performing-loan front, overall, declining net interest margins and increasing credit provisions could lead to a 20-30 basis point reduction in profitability for housing finance companies. However, profits could still be reasonable.
While banks are pegged to grow 14 per cent housing finance companies are expected to grow 24 per cent. Experts say this trend is expected to continue over the next five years.
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