The demand for housing coming from all segments of the market. The affordable housing segment or the middle income, lower income, EWS segment was very strong for a period of three to four years while the upper end of the market, the demand from the higher income group, was relatively slow between 2017 and 2020. But over the last one year, whilst the momentum in the middle income and lower income has continued, there is quite a significant pickup in demand from the higher income groups. Cities like Mumbai, Delhi, Kolkata, Bangalore, Pune, Hyderabad, and Chennai are showing strong growth.

 

If one looks at our average loan amount, a year ago it was about Rs 27 Lakh and the average loan amount in the current year is Rs 31 Lakhs and specifically for this quarter, it is Rs 33 Lakhs which means that a pick-up is explicit.

 

Disbursements have been very strong and individual disbursements for October were indeed the highest ever on a quarter basis. We see strong visibility largely by virtue of the fact that in terms of affordability, in more than a decade, this is the best time to buy a house. There are several reasons for that and interest rates is one of these reasons. Interest rates are as low as they ever get and that is one reason but more important is the affordability issue. In the last four years from 2017 to 2021, income levels have increased by about 7.5-8% a year consistently. Maybe it did not increase in the Covid year but generally they will increase by 7.5-8%.

 

If we do not have any major third wave of Covid and that the individual businesses keep improving month after month so that the situation becomes normal for self-employed customers who have faced some difficulty during the first two waves. Hopefully over the next three-four months the momentum in the economy will continue and businesses will continue to do well and therefore their repayment capacity will keep improving.

 

Having said that, you would see that the percentage of non-performing loans has come down as we have seen about a 25 to 27 bps improvement in the level of non-performing loans. HDFC’s individual non-performing loan level in September stands at 1.1% and it is expected when they finish the year, they would be at a lower level than this.

 

But from an industry standpoint, the total portfolio of affordable housing companies has seen an uptick. There has been a boost in disbursements as well. The mid and low-income segment growth has been as strong as it was in the past; the high-income market has also started seeing a pickup.