Surge in housing loans

Low interest regime helps many:

Sanjeevi JAYASURIYA

The housing loan interest rate which was reduced last October has fuelled growth in the lending market.

The reduction of interest rate over time has increased the demand for housing loans.

The HDFC has provided over Rs one billion worth housing loans for Government servants recording an increase in the demand, Housing Development and Finance Corporation General Manager/ Chief Executive Officer Suresh Amerasekera told Daily News Business.

The HDFC has reduced interest rates in keeping with the low interest regime though its savings base is relatively small.

“The loan process has been simplified to enable an efficient service to customers thereby creating a pleasant relationship between the customer and HDFC,” he said.

“We have ventured in to new areas with branch expansion giving access to a wider section of customers to borrow. There is an increase in the demand for housing loans with the reduction of housing loan interest rates,” he said.

People’s Bank Deputy General Manager (Domestic Credit) K.B. Rajapakse said there is substantial demand for housing loans since the interest rate reduction. The bank has expedited the loan process to benefit customers.

The bank has provided loans amounting to Rs 13 billion under the housing loan scheme for Government servants. It also has different other housing loan schemes for customers and the response is encouraging, he said.

A Bank of Ceylon senior official said the demand for housing loans is high especially for loans below Rs 5 million. “We see an increase in the loans to purchase apartments,” he said.

Hatton National Bank Personal Financial Services AGM P. Sridharan said the housing loan market is improving and this is a good sign. An increase could be seen for the last two to three months as banks have reduced interest rates drastically.

The high demand is not only from Colombo and greater Colombo areas, but also from outstations. Housing construction is heading for a good future, Sridharan said.

The NDB Home Loan and Retail Credit Head Delrene Seneviratne said that the housing loan market has woken up as upto last year the market was stagnated.

“The demand is picking up steadily and it is moving towards a steady growth overcoming market uncertainty,” she said.

“Construction of a house is a single largest investment in a life time. The country is settling down. People are ready to invest in housing. They are optimistic and positive about the future,” she said.