Housing finance sector AUMs set for double-digit growth

Hyderabad: The housing finance sector is benefitting from strong macro drivers despite high interest rates, as indicated by robust residential sales and launches. Housing finance companies (HFCs) are experiencing healthy growth in Assets Under Management (AUM), thanks to solid demand and strong balance sheets.

Retail portfolio is expected to grow steadily, while stress in the wholesale portfolio is gradually decreasing. Asset quality concerns for HFCs are diminishing due to a decline in fresh slippages and improvements in the wholesale portfolio. Although Net Interest Margins (NIM) are under pressure, overall profitability is predicted to rise due to improving asset quality. According to Gaurav Dixit, Director of BFSI Rating at CareEdge Ratings, HFCs are likely to see 12-14 per cent growth in AUM, driven by continued momentum in housing loans and a potential revival in developer loans.