Thrusday, June 03, 2011

Soaring rates pull down home loan growth

              THERE HAS been a slowdown in the growth of housing loans with higher interest rates and rising property prices taking homes out of the reach of the middle- class, according to National Housing Bank ( NHB) chairman and managing director ( CMD) R. V. Verma.
              “ During the four years prior to the 2008 crisis, the housing loan portfolio for housing finance companies grew 25 per cent.
              In 2009- 10, it grew by 19 per cent and in 2010- 11 it slowed to 16 per cent when ` 62,000 crore was disbursed,” Verma told journalists on the sidelines of the 26th Skoch summit in Mumbai.
              Verma pointed out that even in 2009- 10 when the economic recovery began, the growth in home loans was about 19 per cent and that it has now fallen to 16 per cent makes it quite evident that there is a slowdown. Rising interest rates coupled with the jump in property prices have dented loan demand, he said.