India’s housing sector is undergoing significant expansion, driven by supportive government actions and favorable market dynamics. Key statistics underline this trend:
- 14% year-on-year credit growth reported by housing finance companies in Q4 2024-25.
- Individual housing loans outstanding have reached Rs 33.53 lakh crore.
Impressive Growth in Housing Loans
According to the National Housing Bank (NHB), India’s housing finance companies have reported an impressive 14% year-on-year credit growth in the fourth quarter of 2024-25. This surge signals a robust momentum in the residential real estate market. As of September 30, 2024, the total outstanding individual housing loans reached Rs 33.53 lakh crore, reflecting a significant increase from the previous year. The housing market is not only expanding but also diversifying, with the economically weaker sector and low-income groups (EWS & LIG) accounting for 39% of the outstanding loans. The middle-income group (MIG) holds 44%, while the high-income group (HIG) represents 17%. This distribution indicates a broadening appeal of housing finance across different income brackets.
Continuous Rise in Property Values
The past fiscal year has also witnessed a remarkable 8.3% increase in property values, as reported by industry analysts. This rise in property prices is bolstered by several factors, including a favorable interest rate environment. Despite recent increases, the average mortgage rate remains low at approximately 7.2%, compared to over 9% in prior years. This favorable borrowing cost has encouraged more individuals to pursue homeownership. As a result, individual housing loan disbursements during the half-year ending September 30, 2024, totaled Rs 4.10 lakh crore, while the total for the year ending March 31, 2024, stood at Rs 9.07 lakh crore. The conducive market conditions coupled with attractive financing options are fueling demand for residential properties.
Future Outlook for India’s Housing Market
Looking ahead, the Indian housing market is poised for sustained growth. The combination of government initiatives, low mortgage rates, and increased demand from various income segments indicates a positive trajectory. Industry experts believe that as urbanization continues and the middle class expands, the demand for housing will only intensify. “The housing sector is likely to remain resilient, supported by favorable demographics and economic growth,” states Amit Kumar, Senior Analyst at Housing Insights. The continued focus on affordable housing will further enhance accessibility for the EWS and LIG segments, ensuring that this growth benefits a wide range of consumers.
