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Gujarat: Housing loan growth s to 8.7%, value falls by 15%  |  June 11, 2019

Keyur Dhandeo

The rush to buy houses in Gujarat has slowed down in the year 2018-19, according to a recent banking report. However, the loan amount disbursed actually shrunk by 15.13 per cent. A section or realtors say, this is a reflection of shortage of liquidity affecting overall economy in general and real estate sector in particular and slowing down of finance for real estate projects. Another section feel that the numbers indicate that the demand for affordable segment is on a rise.


According to the report of State Level Bankers Committee (SLBC) for the January-March 2019, Gujarat witnessed fresh loan 65,031 loan accounts during the quarter, higher than 57,163 fresh accounts in the same quarter in the previous fiscal. However, the value of loans disbursed ped to Rs 6,293.56 crore compared to Rs 8,224.71 crore in the corresponding quarter in 17-18. This was second consecutive quarter when both loan amount and loan value witnessed a fall compared to previous fiscal. In October-December quarter of 2018-19, loan accounts ped to 32,093 from 49,736 in 2017-18, while loan value ped to Rs 4,751.5 crore from Rs 7,431.86 crore during the same time period.


Throughout the year 2018-19, loan accounts increased to 1,85,664 from 1,70,748 in 2017-18 but loan value ped Rs 21,928.09 crore from Rs 25,836.59 crore. The outstanding loan value has also ped for second consecutive quarter. In January-March quarter the outstanding loan value stood at Rs 66,424 crore compared to Rs 72,806 crore in October &ndash December quarter and Rs 73,211 crore in July &ndash September quarter.


Realtor and MD of Vijay Shah Builders, Vijay Shah said that the decline in finance by Non-Banking Finance Companies (NBFCs) is the major reason for slowdown in housing loans. "This has affected both the project finance as well as housing loan finance. Both have slowed down. Slower growth in fresh demand for housing loan is an indication of recession in real estate sector. There are less buyers now. Real Estate Regulation Act (RERA), demonetization and Goods and Services Tax have further slowed down the market," said Shah.


Following the scams by Nirav Modi and Mehul Choksi, banks are extremely cautious in lending. There are cases where loans have been approved but installments not sanctioned, he added.


The central government has given a number of relaxation to the realtors and end consumers in the affordable housing segment.