After two challenging years, good prospects for housing finance NBFCs

In the near-term though, maintaining NIMs in a rising interest rate environment will be a delicate balance given its potential impact on volumes

After two bad years, the housing finance market overtook pre-Covid-19 (2018-19) levels of disbursement of Rs 2.42 trillion with Rs 2.59 trillion of disbursements in the 2021-22 financial year (FY22).
 
As of FY22, mortgage penetration stands at 13 per cent of GDP, with expectations that India would double home loans to $600 billion by 2027. In other Asian economies, mortgage to GDP ratios range between 20-30 per cent. Hence, India could see exponential growth.
 
By November, the banking sector had seen housing finance (HF) loans up 9.5 per cent (in terms of year-to-date). It’s estimated that NBFCs in