RBI Data Shows Surge in Home Loans: What’s Driving the Growth?


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    Over the past two years, there’s been a significant increase in the amount of money people owe on their home loans. According to data from the Reserve Bank of India, this outstanding home loan amount has gone up by nearly Rs 10 lakh crore, reaching a record Rs 27.23 lakh crore in March of this year.

    Experts say this surge is due to a strong revival in the housing market after the COVID-19 pandemic, as there’s been a lot of demand for houses. They also point to government support, especially for affordable housing.

    The data also shows that loans for commercial real estate have increased, reaching Rs 4.48 lakh crore in March 2024, up from Rs 2.97 lakh crore in March 2022.

    The rise in home loans is mainly because more properties have been built and sold in the past two years, especially in big cities. This has led to higher property prices and, as a result, people taking out larger loans.

    Experts expect this trend to continue as demand for houses remains high. They believe the real estate sector will keep growing and could reach a milestone of USD 1 trillion by 2030.

    Banks have been lending more for home loans, especially after the merger of HDFC with HDFC Bank. This shows that more people are taking out loans to buy homes. Despite this increase, the percentage of people with home loans in India is still lower than in other countries, leaving room for more growth.

    Realtors say there’s been an unprecedented demand for homes in the past two years, especially after COVID-19. People are realizing the importance of owning a home, and this, along with government policies and financing options, has led to more people taking out loans.

    There’s also a growing demand for homes with more space, especially for dedicated work areas. This trend is expected to continue, meaning more people will be taking out loans to buy homes.

    Overall, experts believe the housing market is on an upswing and expect the demand for home loans to remain strong. They’re also urging the government to increase tax benefits for home loans to further boost housing demand.

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