The slowdown in home loan growth would continue in 2007-08, with disbursements expected to grow at only 10 per cent, on the back of a subdued 18 per cent growth in 2006-07.
Besides, the present home loan non-performing asset (NPA) figures of banks understate the extent of delinquency in the sector as loans given in the last three years, which form 71 per cent of the total outstanding home loans, are yet to season, according to a Crisil Research report on mortgage finance.
Mortgage finance by banks and housing finance companies grew 35 per cent on a compounded basis during 2000-01 to 2005-06 to Rs 86,500 crore, boosted by low interest rates and a booming economy.
However, a sustained rise in property prices during 2004-06 along with rising interest rates resulted in a significant slowdown in disbursements in 2006-07, which grew by only 18 per cent year-on-year.
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