Despite high interest rates, home loan disbursals were up 42 percent between January and March compared to the October-December quarter last year, according to a survey by NoBroker.
The results of the survey, which polled 2,000 home-loan customers across Bengaluru, Pune, Mumbai, Chennai, Hyderabad, and Delhi-NCR, said that the demand for home loans grew by 120 percent over the same quarter in the last financial year.
The survey pointed to an increase in the number of millennials opting for home loans. About 27 percent of homebuyers in the 25-35 age group opted for home loans, up from 17 percent pre-Covid.
With the age of applying for home loans having dropped to 36, the survey also pointed out that more "late millennials" were eager to buy a house.
"Younger people who until now did not consider purchasing a property as that would tie them down to a city, are now considering real estate as a fail-safe and lucrative investment opportunity," the survey results said.
Many young homebuyers are taking personal loans to make the down payment, and opting to make pay as little as 10 percent as down payment availing of the offers from many non-banking financial companies (NBFC) looking to build their brand in the home loan market, the survey added.
About 78 percent of the people surveyed feel that home loan rates are not very expensive right now, nor are they very cheap.
"Home buyers appear well aware of the reality of the RBI rate hikes, which, when seen from the perspective of the last 10-12 years, is still at the lower end of the 6-8 percent repo rate range for the better part of the last decade," the survey results said.
NoBroker said that the platform saw the highest demand for home loans in January-March 2023 despite the RBI progressively increasing the repo rate from 4 percent to 6.5 percent over last year, which also led banks to increase their interest rates.
“Home loans generally have a tenure of 20 years. When we look at the recent rate hikes through a 20-year lens, it is clear that over a two-decade period the repo-rate hike and subsequent rate reduction typically average out," said Amit Kumar Agarwal, CEO, NoBroker.
In a separate NoBroker study conducted for millennials, about 63 percent of the respondents said they were looking to purchase a home, compared to 49 percent pre-Covid.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided to keep the repo rate at the same level in April this year despite the turmoil brought on by the global banking crisis, and the contagion risks.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
