Oct. 14: Home finance lender LIC Housing Finance says that some stabilisation seems to be happening on the property prices front.
The company has seen the average loan size for the second quarter increase by about 15 per cent compared to the last year. “Most builders seem to have realised that further price increases are going to be suicidal,” said Mr. RR Nair, director & CEO.
He was speaking to this publication after the company’s second quarter results. For the September quarter, LIC Housing Finance recorded a profit after tax of `234 crore, up 37 per cent over the last year. Loan disbursements by the company totalled to `5,101 crore for the quarter, up 36 per cent over the last year. The number of loans given out was up by about 19 per cent, Mr Nair said.
This implies an increase of about 15 per cent in the average loan size — largely on account of property prices. Sales in the two biggest markets, Mumbai and the National Capital Region, have fallen 23 per cent and 13 per cent in the September quarter compared to the June quarter, says brokerage house JP Morgan in a recent note.
However, affordability in most markets other than Mumbai is good, the broker says, as prices haven’t increased to the same extent. The key markets in the South — Chennai and Bengaluru, have seen an increase over the same period. Recovery in the tech sector is partly responsible for the improved sentiment.