The state-run LIC Housing Finance Ltd., a major player in the housing finance expects the demand for the home loans to boost this fiscal on the note of banks reducing the lending rates.

R. R. Nair, director & chief executive, LIC Housing Finance Ltd, said,"There has been a lot of demand spurt. We are having a growth of more than 100 percent in April and May."

The company registered a 40 percent increase in the number of loan applications received during the first two months of current the fiscal year as compared to the last fiscal. He also said that the loan defaults for the current fiscal are expected to be 1 percent, as against the 1.07 percent during the previous fiscal.

The development of affordable housing units for low and medium income groups by the developers like Tata Housing Development, DHFL Property Services Ltd. are also expected to elevate demand in the housing market.

"Affordable housing is a very imaginative idea, because 60-70 percent of the demand falls in that category," Nair added.

During the financial year 2008-09, the demand in the industry retarded significantly due to the high lending rates and overall economic slowdown. The reluctance in slashing the rates by the developers is also considered to have affected the demand negatively.

Pointing the market trends, Nair said, the housing prices have bottomed and are likely to rise in the next six months.

Nair indicated the increase in the average size of loan from 1.2 million rupees during last fiscal to 1.5-1.6 million rupees during this fiscal. He also said that the company expects to disburse loans amounting to 120-130 billion rupees during this fiscal, which is a 30 percent rise when compared to the previous fiscal.