The genuine demand for housing loans still existed, while speculative demand for these loans had receded. The demand in some pockets like Gurgaon was saturated, but the middle class in tier-II and tier-III towns, where ticket size was small still sought credit, said SBI Chairman O P Bhatt today.
The home loan credit growth has dropped sharply across banks in the last one year due to a substantial rise in the lending rate. The increase in the amount paid for monthly loan repayments and elevated property prices have had an adverse effect on the home loan demand.
At the beginning of the year (January 2008), the bank had set a high internal target of over 30 per cent growth in credit. However, with a sharp rise in inflation and global uncertainty, expectations about growth have tempered somewhat, another SBI official said.
Bhatt was optimistic about the Indian economic growth story.