Robust Govt Policies Spur Housing Sector’s Credit Growth At 14%

Mumbai: India’s housing sector is experiencing unprecedented growth, fuelled by robust government initiatives and favourable market conditions. According to the latest National Housing Bank (NHB) report, housing finance companies have registered an impressive 14 per cent year-on-year credit growth in Q4 2024-25, which is herald of strong momentum in the residential real estate market. Talking to Bizz Buzz, Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said: “India’s housing sector is on a strong growth path, fueled by rising homeownership aspirations, rapid urban expansion, and supportive policies.”

As cities grow, homebuyers are prioritising well-planned, well-connected communities that enhance their lifestyle and long-term investment value. This trend is expected to continue, with evolving buyer preferences driving demand for homes that offer a blend of quality, convenience, and future-ready design, he said. Individual housing loans outstanding as of September 30, 2024, stood at Rs 33.53 lakh crore, showing a growth of 14 per cent over the corresponding period of the previous year. As of September 30, 2024, the economically weaker sector and low-income group (EWS & LIG) accounted for 39 per cent, the middle-income group (MIG) accounted for 44 per cent, and the high-income group (HIG) accounted for 17 per cent of outstanding individual housing loans, the report mentioned.

Individual housing loan disbursements during the half-year ended September 30, 2024, were Rs4.10 lakh crore while disbursements during the year ended March 31, 2024, were Rs 9.07 lakh crore, the report stated.

Pradeep Aggarwal, Founder and Chairman, Signature Global, said: “The NHB report reinforces what we have been seeing in the market - the mid-income group (MIG) is becoming the backbone of the housing sector, making up 44 per cent of outstanding individual housing loans.”

This segment is growing rapidly, driven by urbanisation, increasing incomes, and supportive government policies, reflecting a strong desire for homeownership. Middle-income buyers are looking for well-designed homes in prime locations that offer a balance of quality and convenience. This trend is expected to continue in the coming months, further strengthening the sector. At Signature Global, we remain committed to catering to this evolving demand by delivering thoughtfully planned, high-quality homes that align with modern lifestyles, Aggarwal added.

The past fiscal year saw a robust 8.3 per cent increase in property values, according to the NHB’s RESIDEX, which measures residential property prices in 50 major cities. Record-low mortgage rates, which, in spite of recent increases, are still advantageous at an average of 7.2 per cent as opposed to previous levels of over nine per cent, have accompanied this expansion.

In response to this conducive environment, real estate developers are launching more projects. The top eight cities witnessed a 22 per cent rise in the supply of new housing in 2024, according to Prop Equity data, with 60 per cent of new developments being inexpensive and mid-segment housing.

Rahul Singla, Director, Mapsko Group, said: “India’s residential sector has been witnessing an upscale shift, owing to the progressive government schemes and recently announced, 14 per cent Credit growth, highlighted in the NHB report. This upsurge is not just about numbers, it represents a paradigm shift in homeownership, affordability, and economic empowerment. These policies have further elevated financing and increased buyer confidence.”

The positive trajectory is further supported by regulatory reforms like RERA implementation and GST rationalisation. The digitisation of land records and single-window clearance systems in progressive States have reduced approval timelines by 40 per cent, according to Knight Frank’s India Real Estate Report.