NEW DELHI: The pandemic might have taken a chunk out of many salaries and sent general credit flows diving, but the accompanying fall in interest rates and new, lower circle rates in some areas have actually led to a substantial increase in the ticket sizes of home loans.
Smaller towns were also the primary drivers of credit this year, not just in home loans but also personal loans and credit card debt.
According to a study by online financial services marketplace BankBazaar, changes in work structures and shifting priorities have resulted in home-buyers who decided to buy homes this year opt for larger spaces and home loans.
“Consequently, the average home loans ticket size saw a strong increase from Rs 23.82 lakh in 2019 to Rs 26.41 lakh in 2020. The average ticket size for women went up from Rs 25.66 lakh to Rs 31.20 lakh compared with an increase from Rs 23.64 lakh to Rs 26.04 lakh for men,” the report noted, adding that the share of home loans below Rs 30 lakh decreased to 68 per cent from 72 per cent a year ago.
While the largest home loan on record this year was from Bengaluru, for an amount of Rs 1.46 crore, among non-metros, the largest such loan came from Lucknow, for Rs 64.50 lakh. Going forward in 2021, home loans will continue to be a buyer’s market, the study noted.
“Continuance of PMAY benefits, choice inventory, slashed registration costs in some places, and record low interest rates on home loans work in favour of those who can afford to buy a home for self-occupation. The reverse migration especially among the older millennials and Gen-Xers to their hometowns thanks to remote working policies could have a very interesting impact,” BankBazaar said.
This shift in the more affluent working population may be strengthening small-town India’s financial heft.
In the personal loan category, for instance, non-metros continued to average higher in ticket size, at an average of Rs 2.06 lakh compared to Rs 1.84 lakh in metros.
This trend holds for the credit card segment too.