Mortgage Trends in MMR and Pune (January - March 2022)

Affordable Housing Apr 22, 2022

The mortgage market in the MMR-Pune region has continued its growth in registered mortgage transactions in the January - March quarter (Q1) of 2022, maintaining momentum from the last quarter. Favorable demographics, improved affordability of residential properties and historically low mortgage rates are pushing the demand for home loans. Among the different geographies examined, Pune recorded the highest growth QoQ.

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The MMR region - which consists of Mumbai, Mumbai Suburban, Thane, Raigad and Palghar - recorded a quarterly increase of 9.65%. Registered mortgage transactions in Pune, however, witnessed a more substantial increase of 55.02%. Affordable Home Loans (ticket size < Rs. 45 Lakhs) remained an important component of home loans, contributing 66.91% by volume in Q1 2022 in the MMR-Pune region. Tier - 1 cities such as Mumbai and Pune were seen to have a less substantial share of Affordable segment transactions compared to the other parts of the region. Overall home loan transactions in the MMR-Pune region recorded a YoY decline of 2.36% in Q1 2022 compared to Q1 2021. Pune noted the steepest decline of 10.90% compared to the figure in Q1 2021, while Raigad observed the biggest growth during the same period, with an increase of 20.90%. The reason for an overall decline in YoY transactions can be attributed to the surge caused by the post lockdown period, and policy changes by the government of Maharashtra to reduce stamp duty both in Q4 2020, and Q1 2021.

Among financial institutions, household names such as the State Bank of India, Axis Bank, HDFC, and LIC HFL continued to be the preferred options in terms of the loans disbursed throughout the entirety of the MMR - Pune region.

We shall now look at Mumbai from a closer lens.

Premium Segment Continues to Drive Mortgage Sales in Mumbai

Mumbai, where house prices are generally on the higher end of the spectrum, saw a predominant share of mortgages taken by the Premium segment, with an average share of 44.38% in Q1 2022.

Exploring further, it is seen that the biggest borrowers for the Premium segment in Mumbai are individuals who fall in the age bracket of 30-45 years, representing 51.34% of total borrowers, closely followed by those in the 45 and above bracket.

Preferred Financial Institutions by Type

Looking at the preferred options for financing, it is seen that State Bank of India, Kotak Mahindra Bank, Bajaj Finance and HDFC Limited are the leading institutions for mortgage transactions in Public Banks, Private Banks, Home Finance Companies, and Non-Banking Financial Companies (NBFC's) respectively.

Malad and Kandivali Saw the Most Number of Mortgage Transactions

Malad was the leading locality in terms of transaction volume in Q1 2022 with 785 registered transactions. Other prominent localities for Mumbai were Kandivali and Kanjur, making up for the bulk of mortgage activity in Mumbai.

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