New Delhi: The Centre's focus on affordable housing for all could push overall home loan growth to 20-22 per cent this fiscal year, rating agency Icra said.
The segment has seen growth of 17 per cent in the first nine months of 2014-15.
"Government's focus on affordable housing, favourable regulations could push overall housing credit growth to 20-22 per cent FY16 onwards, which could lead to improved mortgage penetration from current levels of 8.2 per cent," the rating agency said in a report.
The housing finance market has crossed the Rs 10 lakh crore mark, as of December 31, 2014, it said.
Of this Rs 10 lakh crore housing loan book, Rs 6.3 lakh crore loans is with the banking sector and the balance Rs 3.7 lakh crore with housing finance companies (HFCs) and non-banking financial companies (NBFCs).
The report said investor sentiment for the housing sector has also improved as reflected by the recent capital infusions to the tune of Rs 1,780 crore in various housing finance companies (HFCs) in 2014-15, and they are expected to report gearing levels of 7.5-8 times by March 31, it said.
In Icra's estimates, HFCs will need external capital of around Rs 18,000-28,000 crore to grow at 20-22 per cent over the next 5 years, assuming an internal capital generation of 16 per cent while maintaining the capitalisation levels at current levels.
HFCs have been able to maintain an asset quality gross NPA percentage of 0.74 per cent as of December 31, 2014, it said.
Going forward, the report expects gross NPA percentage to remain range bound between 0.7 per cent and 1.1 per cent.
While the market continues to be dominated by the five large groups namely SBI Group, HDFC Group, LIC Housing Finance, ICICI Group and Axis Bank, accounting for 60 per cent of the total housing credit in India as of December 31, 2014, there has been an emergence of a number of new HFCs in niche segments like affordable housing.
This segment has been growing at a faster pace higher than 50 per cent for the nine months slowly gaining market share.