Its real estate companies which are flocking to the banks for funds not home buyers. Though real estate prices have stabilised and even declined in many regions in the country,home buyers are not standing in a queue to avail themselves of loans. The growth in housing loans during the year up to May 22,2009 has come down to five per cent at Rs 13,028 crore as against 13.8 per cent (Rs 31,735 crore) during the previous year ended May 23,2008,figures released by the RBI showed.
On the other hand,real estate companies have recorded a 52 per cent rise in their bank loans at Rs 32,321 crore in the last one year as against just Rs 17,018 crore (or 37.7 per cent growth) in the previous year,the RBI said.
Personal loans that accounted for 7.6 per cent of the incremental non-food credit witnessed some moderation; within personal loans,housing loans decelerated to a large extent. Growth in loans to commercial real estate,however,remained high, the RBI said in its first quarter review of the monetary and macroeconomic developments. Analysts said real estate companies were facing a resource crunch in 2008-09 following a demand slump and slowdown in the economy. Many realty companies had recently raised funds through the QIP (qualified institutional placement) route.
The growth in housing loans is much lower than the total non-food credit offtake that grew by 17.6 per cent during the year ended May 22,2009. Non-food credit growth (y-o-y) of scheduled commercial banks (SCBs) that reached its peak in October 2008,witnessed deceleration thereafter. This trend also continued in the first quarter of 2009-10. While it is not unusual for the first quarter to show deceleration in expansion of credit because of seasonal factors,the deceleration was particularly pronounced during the first quarter of 2009-10. This was because of a decline in credit by Rs 18,796 crore to petroleum and fertiliser firms during April-May 2009.