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The asset quality of housing finance companies (HFCs) is expected to deteriorate in the medium term due to prospects of a spate of defaults by builders and slowdown.
The gross non-performing assets (GNPAs) of HFCs will rise to 2.2 per cent from 1.8 per cent in June 2018, according to ICRA.
Markets like Surat and Pune in the affordable segment could show higher slippages owing to delays and challenges faced by some projects.
The overall gross non-performing assets of HFCs rose to 1.8 per cent as of June 30, 2019 (1.6 per cent as of March 31, 2019).
The deterioration in the construction finance segment and a general increase in bad loans during Q1FY20 led to rise in GNPA.
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