Small towns corner 80% home loans

There has been a boom in demand for home loans in tier-2 and -3 cities and towns due to the hybrid working model, expansion of MSMEs and smaller ancillary businesses, besides the post-pandemic recovery in these locations. Leading housing finance companies have recorded 60-80% of their sanctioned home loans emerging from tier-2 and -3 cities during the first quarter of the current fiscal.

The demand from the southern states is on the higher end. At the same time, experts in the real estate sector said the recent hike of 50 basis points (100bps = 1 percentage point) by the RBI could affect sentiment of homebuyers, causing a short-term impact in sales.