Mumbai, Affordable housing financiers are likely to witness a moderation in the growth of their assets under management up to 21 per cent in FY26 from 23 per cent in FY25, a report said on Tuesday.
The AUM growth is likely to stay flat at 20-21 per cent in the upcoming fiscal year 2026-27 as well, the report by domestic rating agency Crisil said.
The loan against property (LAP) segment should see some moderation in growth at 24-26 per cent in FY26 from 30 per cent, as lenders recalibrate underwriting following asset quality pressure in some sub-categories of borrowers, it said, adding that this will lead to an inching-up of the credit costs.
From a bottomline perspective, the rating agency said, the profitability is seen a tad lower but should be healthy in both FY26 and FY27.
Overall, the mortgage finance industry will see a growth of 18-19 per cent in the two fiscals, it added.
Stating that the performance of small-ticket LAPs bears watching, it said between FY24 and FY25, more than 70 per cent of affordable HFCs saw a notable increase in assets overdue for over 90 days in the sub-Rs 15 lakh category by 0.25-30 per cent, and the trend continued in the first half of FY26.
Higher borrower leverage and spillover of asset quality pressures from the adjacent microfinance customers in certain pockets have caused the uptick in stress, along with seasoning, it said.
The affordable HFCs' AUM growth is faster than overall housing finance growth because of the relatively lower direct competition from banks compared with the prime lending segment, high growth potential fuelled by rising urbanisation, and supportive government policies for affordable-housing construction and financing.
However, as banks increase their presence in the prime home loan market, traditional HFCs are likely to pivot towards the affordable-housing segment, seeking to capitalise on growth opportunities and generate higher yields, the rating agency added.
The AUM growth is likely to stay flat at 20-21 per cent in the upcoming fiscal year 2026-27 as well, the report by domestic rating agency Crisil said.
The loan against property (LAP) segment should see some moderation in growth at 24-26 per cent in FY26 from 30 per cent, as lenders recalibrate underwriting following asset quality pressure in some sub-categories of borrowers, it said, adding that this will lead to an inching-up of the credit costs.
From a bottomline perspective, the rating agency said, the profitability is seen a tad lower but should be healthy in both FY26 and FY27.
Overall, the mortgage finance industry will see a growth of 18-19 per cent in the two fiscals, it added.
Stating that the performance of small-ticket LAPs bears watching, it said between FY24 and FY25, more than 70 per cent of affordable HFCs saw a notable increase in assets overdue for over 90 days in the sub-Rs 15 lakh category by 0.25-30 per cent, and the trend continued in the first half of FY26.
Higher borrower leverage and spillover of asset quality pressures from the adjacent microfinance customers in certain pockets have caused the uptick in stress, along with seasoning, it said.
The affordable HFCs' AUM growth is faster than overall housing finance growth because of the relatively lower direct competition from banks compared with the prime lending segment, high growth potential fuelled by rising urbanisation, and supportive government policies for affordable-housing construction and financing.
However, as banks increase their presence in the prime home loan market, traditional HFCs are likely to pivot towards the affordable-housing segment, seeking to capitalise on growth opportunities and generate higher yields, the rating agency added.
