RBI Shows a sign of pace in home loan demand in First month of 2012.

State Bank of India records a growth of 40 %, home loan have come down by 20 %. A year ago, the home loan book had an average monthly growth of Rs 1,200 crore. It is now down to about Rs 900 crore to Rs 1,000 crore. SBI home loan book is the biggest at Rs 92,383 crore.

SBI in charge of home loan division, the growth in home loans, which is around 20 % at present, is likely to come down further in the next three-four months. Smaller cities may not be affected from decline in home loan. On other hand, Home loan demands decline in Mumbai and NCR areas. Bangalore is doing well in home loan market. Hyderabad is also on pace.

With a Launch of Some new products in housing loan, HDFC also records growth in home loan arm. HDFC assume a growth of 18-20 % growth in home loan book. “There is a slowdown in select areas like Mumbai and Delhi, but other branches are making up for it. It is the cost of house that is killing the demand in these markets,.

After Waive off prepayment penalty, ICICI Bank home loan market has an outstanding of Rs 55,118.7 crore as on September 30, growing by Rs 5,367 crore in the second quarter alone. The bank maintains that it will grow its mortgage business while scaling down on the unsecured lending book like credit cards, personal loans and two wheeler loans.

Other banks such as Axis Bank and Union Bank of India are trying to set up loan processing centres in new markets, including smaller towns, to capture the latent demand in these locations, rather than tap the markets after the bank branch is opened.

To enhance home loan portfolios, banks are now looking to penetrate small towns and cities. The housing shortage in India is estimated at 24.7 million units, according to the government census report. Of this, 14.1 million is in rural areas and the remaining 10.6 million in urban areas.