Home loan market rebound post-Covid in 2021:

The home loan market is recovering from the loss it suffered in the previous year of 2020 due to complete lockdowns. The real estate companies are posting healthy growth despite the pandemic in the major markets of the Mumbai metropolitan region, Delhi NCR, Bangalore, Hyderabad, Chennai & Pune. The home loans market is directly related to the sale of flats in the markets. Also, the home loans can be availed for the resale properties for which full down payment needs to be done within a short period. The demands for real estate are growing as the people are making huge revenue through investment in stock markets, IT companies growing exponentially, and the medical professionals. They gained substantial income due to COVID duty. Also, the government employees’ salaries are not affected due to the Covid. Thus the target segment includes IT professionals, medical professionals, government employees, and many other private companies’ employees posting healthy growth even during the pandemic. The income levels have been affected amongst the labor class, traders & some other industries which are dealing in non-essentials in the B2C segment. But the overall pandemic situation has improved as people have adjusted to the situation and are finding ways to generate income.

The home loans market is growing at 22% annually, thus posting healthy growth in the markets. The demand for houses in tier II cities has also grown as the people are shifting to their native places and planning to work from remote sites also planning to settle in smaller towns. There has been a reverse migration from metros to tier II & tier III cities; thus, the demand is not saturated in just particular markets but is evenly spread out. As amongst the many flat buyers, many people cannot buy flats without home loans the demand for home loans automatically increases. Also, the borrower gets a tax rebate on the home loans being availed under the income tax act 80C. Some of the top public sector banks and private banks are amongst the key lenders of home loans. While the share of the co-operative credit societies and the NBFC’s share in the markets is still very low. The co-operative credit societies and the NBFC’s have liberal policies in loan disbursement compared to the public sector or private banks.

Reasons for the growth in home loans markets post-Covid:

• The disposable incomes have risen in case of people working in corporate companies thus the purchase of flats is increasing.
• Some sectors in the industry like IT companies, automobile companies & FMCG companies, and many others are posting healthy growth, thus bringing in positive sentiments amongst the home buyers.
• The stock markets are increasing rapidly; thus, investors are gaining considerable profits on selling shares in the stock market or units in mutual funds.
• Non-essentials spending has drastically reduced, and due to work from home, people are saving money on transportation and many other expenses; thus, work from home is helping people save a lot of money, thus helping them invest in properties.
• The tax sops for the home buyers remains as it is, and thus, the benefits of income tax on availing home loans are available, thus encouraging the buyers to buy houses.
• Many organizations provide salary increments to their employees and some perks to retain the best talent in their companies.
• Along with the corporate professionals, medical professions have gained a significant amount of revenue due to high expenses incurred by the public on healthcare. Thus, many categories of a segment of people have gained significantly high revenues during the covid times.
• The real estate companies provide better-negotiated rates or discounts to the customers in flat sales, thus increasing real estate sales.

Conclusion:

Thus due to the high disposable incomes amongst people from a corporate background and many other professional fields, the demand for housing is increasing significantly in the market. The higher demand for housing is directly related to the home loans markets; thus, the disbursement of home loans is also proliferating in the markets. Also, the borrowers can save on tax benefits by investing in properties and availing tax benefits on home loans.