CHENNAI: The housing market in 2013, the last year for which data is available, seems to have catered to high-end users more than the middle class. As a result, while the number of housing loan accounts with commercial banks dropped by 2.7% between 2012 and 2013, the total amount disbursed through such loans increased by 7.3%, according to data just released by the Reserve Bank of India.
Realtors and bankers TOI spoke to felt the number of accounts had fallen due to the high price of real estate in cities, which was dissuading the lower income groups. On the other hand, the number of people going in for housing loan amounts ranging from Rs 2 crore to Rs 8 crore increased.
In 2012, the total number of housing loan accounts with all scheduled commercial banks was 47.78 lakh. In 2013, it came down to 46.43 lakh. During the same period, the total loan amount disbursed under this category increased from Rs 2.6 lakh crore to Rs 2.8 lakh crore.
The reduction in the number of accounts year-on-year is unusual. In 2011, the number of accounts was 47.32 lakh, which went up to 47.78 lakh in 2012, with the disbursed amount also increasing from Rs 2.5 lakh crore to Rs 2.6 lakh crore.
"There is a general perception that housing projects will be delayed and this has dissuaded many from investing in multi-storey apartments. The other reason could be the price of apartments in urban areas. The price of apartments within cities has not come down and only people who can afford in crores opt to invest in purchase of apartments," said Confederation of Real Estate Developers' Associations of India (Credai) Tamil Nadu chapter president N Nandakumar.
Input costs have also increased by 8% to 25% in the last few years. This has increased construction costs and coupled with rising land prices, the cost of an apartment has also gone up significantly in urban areas, said Nandakumar.
Almost all states and Union territories have seen a drop in the number of accounts. For example, Delhi had 1.41 lakh housing loan accounts in 2012 but in 2013, the number dropped to 1.06 lakh accounts. In Maharashtra, the number of accounts in 2012 was 83.67 lakh and it dropped to 83.60 lakh though the amount disbursed went up from Rs 83,674 crore to Rs 87,046 crore.
"The main reason for drop in housing loan accounts is the high price of property. Not many in the middle income group are able to afford houses in the city and there are many apartments with big builders awaiting customers," said Nallaperumal Pillai, chief manager of SBI personal banking division. Previously many would seek loan amounts ranging from Rs 15 to Rs 20 lakh but in the last few years, the amount has gone up to Rs 1 crore or more, said Pillai.