Home loan touched record Rs 27.23 lakh crore in March 2024: RBI data

Home loan touched a record Rs 27.23 lakh crore in March 2024

Home loan touched a record Rs 27.23 lakh crore in March 2024

According to the Reserve Bank of India’s ‘sectoral utilization of bank credit’ data, outstanding loans to the housing sector have increased by nearly Rs 10 lakh crore in the last two fiscal years, reaching a record high of Rs 27.23 lakh crore in March this year. Experts from the banking and real estate sectors attribute this growth to the strong recovery in the residential real estate market after the Covid-19 pandemic, driven by pent-up demand. As of March 2024, the housing sector debt (including priority sector housing) was Rs 27,22,720 crore, up from Rs 19,88,532 crore in March 2023 and Rs 17,26,697 crore in March 2022, as per RBI data.

The data also shows that commercial real estate debt touched Rs 4,48,145 crore in March 2024 as against Rs 2,97,231 crore in March 2022. There has been a significant increase in residential sales and prices in the last two years, as per reports of various real estate advisors.

Read also: Selling a residential property? What are the different ways to save on taxes?

Factors driving the development of the housing sector:

– Recovery after Covid-19: After the Covid-19 pandemic, the residential real estate market saw a strong recovery in terms of properties introduced to the market

– Affordable housing segment: The affordable housing segment has seen significant growth due to government initiatives

– Pent-up demand: There has been a subdued demand for home purchases in the last two years following the Covid-19 pandemic, which is now reflected in the growth in home loans.

“The increase in home loan outstanding is primarily due to the significant increase in the number of properties launched and sold in the last two fiscal years, Samir Jasuja, CEO and Managing Director, PropEquity, told PTI. “Major Tier 1 cities have witnessed a high price appreciation rate of 50-100 per cent since FY2021, which has contributed to the growth in average property loan size,” it said, expecting the home loan segment to remain at the same trend growth due to high demand for residential properties.

The real estate sector, which supports over 200 ancillary industries, has seen strong demand since 2022, after a decade of subdued sales and stable prices due to disruptions caused by new real estate laws, GST and demonetization.

Industry experts believe that the sector could reach the $1 trillion mark by 2030.

Realtors believe the sector is in its second or third year of long-term recovery. To further boost the demand for housing, industry bodies like CREDAI and NAREDCO are demanding that the government increase tax benefits on home loans, proposing to increase the amount of deduction allowed on interest payment to Rs 5 lakh from the current Rs 2 lakh.