HDFC Ltd has approved retail home loans of over Rs 2 lakh crore in FY22, its highest ever in a financial year.

“In over four and half decades, I have not seen a better time for the housing sector than now due to lower interest rates, stable property prices, government’s thrust on affordable housing, improved affordability, favourable demographics, increasing urbanisation and rising aspirations,” HDFC managing director Renu Sud Karnad said.

The sweet spot for housing is still in the price range between Rs 50 lakh and Rs 1 crore.

The thrust on digital initiatives and the inherent demand for housing helped HDFC Ltd get back to normalcy faster than expected. Over 89% of retail loans are sourced online, up from less than 20% before Covid-19.

The demand was driven in both metro and non-metro areas in the affordable as well as the premium property segment, the mortgage lender said.

In the year-ago period, HDFC Ltd had processed home loans totalling Rs 1.55 lakh crore.

“The government’s thrust on housing is a recognition that a rapidly growing country like India with a large young population needs more houses at affordable price points which would enable more households to become homeowners,” Karnad said.

Affordable housing will continue to be the driving force behind the real estate sector in India. “The demand for affordable homes in India is extremely deep and resilient. With more developers transitioning to the mid and affordable segment by providing right-sized, right priced units which are affordable for end users, the affordable residential real estate segment will continue to see strong traction,” HDFC Ltd said.

To increase its footprint in the affordable housing segment, the lender has signed MoU with various entities, whereby it is raising funds which will be directly deployed in these segments.

The central government schemes such as credit-linked subsidy scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) have also aided in boosting sales.

The residential real estate segment will continue to see strong traction going forward as the demand for housing is not just pent-up demand but it is a structural one, Karnad said.

Around 270,000 home loan customers of HDFC Ltd have availed off the benefits of the CLSS scheme of the government. The lender has disbursed loans to the tune of Rs 45,914 crore under the CLSS scheme as of December end, wherein the subsidy amount stood at Rs 6,264 crore. Further, for the nine months ended December 31, 2021, 30% of home loans approved in volume terms and 13% in value terms have been to customers from the economically weaker section and low-income groups.