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The Bank with an internal desk research came up with a “Study Note on Post COVID 19:
Housing and Housing Finance Sector”. The key findings of the Study are detailed in the Box:
Box 3.1: Study on the Impact of COVID 19 on the Housing Finance Sector
The COVID-19 outbreak has led to a global health crisis; putting pressure on economies
across the globe. Economies across the world plunged into deep contractions in the April-June
quarter of 2020. In particular, the financial sector and the housing sector felt the heat of the
restrictions and lockdown to a large extent. Accordingly, NHB conducted a study to evaluate
the impact of COVID 19 on the Housing Finance Sector.
The Study was done in two parts during 2020 and 2021 with an attempt to analyse the outbreak
of COVID 19, challenges for the housing and housing finance sector of India, mitigants and
measures to minimize the negative effect of COVID 19 and the recovery efforts undertaken by
different stakeholders including GOI, RBI and NHB.
The findings of the study included the following:
1. The outburst of COVID-19 and the subsequent lockdown opened a new set of challenges
for the entire housing finance industry, which was already struggling through liquidity
constraints since 2019. However, with the help of liquidity infusion and moratorium
measures, Housing Finance Companies (HFCs) managed to bring their best game forward
during the pandemic.
2. Overall loan sanctions of HFCs more than doubled in the third quarter of FY 2020-21 as
compared to the first quarter of FY 2020-21. Disbursements have followed the same trend,
and the total outstanding has also increased despite repayments. The increase in the third
quarter has been tremendous especially during the year end wherein the affordable and
luxury housing market recovered to near Pre-Covid levels. Lower rates of home loan,
consolidation, need for bigger homes due to work from home and ready to move in
properties were reasons for the recovery of the residential housing market.
3. The GNPA percentage of the housing finance loans remained same and decreased over
three quarters and a marginal increase was noted during the last quarter of the year i.e.
January- March 2021. Further, the NNPA levels maintained a decline despite the increase
in sanctions, outstanding and disbursements. This is a clear indication of the recovery of
the housing finance market to Pre-Covid levels.
Annual Report 2020-21 | 233
Housing and Housing Finance Sector”. The key findings of the Study are detailed in the Box:
Box 3.1: Study on the Impact of COVID 19 on the Housing Finance Sector
The COVID-19 outbreak has led to a global health crisis; putting pressure on economies
across the globe. Economies across the world plunged into deep contractions in the April-June
quarter of 2020. In particular, the financial sector and the housing sector felt the heat of the
restrictions and lockdown to a large extent. Accordingly, NHB conducted a study to evaluate
the impact of COVID 19 on the Housing Finance Sector.
The Study was done in two parts during 2020 and 2021 with an attempt to analyse the outbreak
of COVID 19, challenges for the housing and housing finance sector of India, mitigants and
measures to minimize the negative effect of COVID 19 and the recovery efforts undertaken by
different stakeholders including GOI, RBI and NHB.
The findings of the study included the following:
1. The outburst of COVID-19 and the subsequent lockdown opened a new set of challenges
for the entire housing finance industry, which was already struggling through liquidity
constraints since 2019. However, with the help of liquidity infusion and moratorium
measures, Housing Finance Companies (HFCs) managed to bring their best game forward
during the pandemic.
2. Overall loan sanctions of HFCs more than doubled in the third quarter of FY 2020-21 as
compared to the first quarter of FY 2020-21. Disbursements have followed the same trend,
and the total outstanding has also increased despite repayments. The increase in the third
quarter has been tremendous especially during the year end wherein the affordable and
luxury housing market recovered to near Pre-Covid levels. Lower rates of home loan,
consolidation, need for bigger homes due to work from home and ready to move in
properties were reasons for the recovery of the residential housing market.
3. The GNPA percentage of the housing finance loans remained same and decreased over
three quarters and a marginal increase was noted during the last quarter of the year i.e.
January- March 2021. Further, the NNPA levels maintained a decline despite the increase
in sanctions, outstanding and disbursements. This is a clear indication of the recovery of
the housing finance market to Pre-Covid levels.
Annual Report 2020-21 | 233
