Home Loan Growth Higher in Non-Metros Cities in India

Know the major reasons behind the growth of housing loan in non-metros cities of India.

30th Jul 2019
  • +0
Share on
close
  • +0
Share on
close
Share on
close

Non-metro cities in India witnessed a growth in the home loan sector from 15% to 36% between fiscal years 2012-13 and 2017-18. However, growth in the metro cities increased to 12% from 8% during the same period. Also, in this period, the market for home loans in India grew from Rs. 4.6 trillion to Rs. 9.7 trillion.


Some Tier-II and Tier-III cities that witnessed maximum growth were Gandhinagar, Bilaspur, Surat, Howrah and Patna.


Various initiatives from the Government to provide affordable homes for citizens and availability of properties with improved infrastructure in these cities have boosted the residential real estate sector. Home loan is the most preferred tools to fund the required expenses to buy new properties in these cities.


Here is a list of reasons that has aided the growth of home loans in non-metro cities.


Pradhan Mantri Awas Yojana (PMAY)


The PMAY initiative from the Indian Government aids first-time borrowers from non-metro cities to avail home loans with subsidised affordable housing interest rates. First-time borrowers can avail the key benefits of the Pradhan Mantri Awas Yojana to purchase their dream residences.

The Government aims to provide affordable homes for every citizen in this country with the help of the PMAY initiative. Beneficiary groups that claim subsidy for home loans in India are as follows –


  • Low Income Group(LIG) 

Individuals having a household income between Rs. 3 Lakh to Rs. 6 Lakh fall in the LIG category. They can avail an interest subsidy of 6.5% on home loans up to Rs. 6 Lakh.


  • Middle Income Group I(MIG I) 

Individuals having a household income between Rs. 6 Lakh to Rs. 12 Lakh fall in the MIG I category. They can avail an interest subsidy of 4% on home loans up to Rs. 9 Lakh.


  • Middle Income Group II (MIG II) 

Individuals having a household income between Rs. 12 Lakh to Rs. 18 Lakh fall in the MIG II category. They can avail an interest subsidy of 3% on home loans up to Rs. 12 Lakh.

Some financial institutions provide home loans with the facility of availing interest subsidy under the


PMAY scheme. There are few NBFCs that offers home loans with affordable housing loan interest rates under the PMAY scheme. Some other benefits they provide include –


  • Zero charges on part pre-payment or foreclosure
  • Easy balance transfer facility
  • Top-up loan facility


Easy Home Loan Online Apply Process


Financial institutions have simplified the process of availing home loans. Borrowers can fill up an application form from the website of the lender to start with the process. The lenders conduct a thorough verification process after the borrowers submit the required documents. This simplified process has increased the convenience of availing home loans as there are fewer lenders in the non-metro cities compared to the top cities.


Growing Job Opportunities


Various multinational companies have established their offices in non-metro cities over the past few years. Individuals from all across the country settle in these cities to pursue their career. The need for affordable homes has increased with the rise in population influx in these cities. Hence, the non-metro cities have experienced a massive surge in the number of home loans. For this reason, the likes of Pune, Patna and Ahmedabad is a great choice for property investment.


Apart from the reasons mentioned above, growing income in the lower and middle-income groups of the society has also provided impetus to this growth. Also, the various favourable facilities from financial institutions is another reason behind this progress.

  • +0
Share on
close
  • +0
Share on
close
Share on
close
This is a YourStory community post, written by one of our readers.The images and content in this post belong to their respective owners. If you feel that any content posted here is a violation of your copyright, please write to us at mystory@yourstory.com and we will take it down. There has been no commercial exchange by YourStory for the publication of this article.
Report an issue
Authors

Related Tags

Our Partner Events

Hustle across India