Housing finance market may double to Rs. 81,00,000 crore (US$ 928 billion) in five years

India’s housing finance market is projected to double in the next five years, reaching Rs. 81,00,000 crore (US$ 928 billion) from the current Rs. 33,00,000 crore (US$ 378 billion), according to a report by CareEdge Ratings. The growth is expected to be driven by robust structural factors, favourable government incentives, and rising ticket sizes. The report highlights that between 2021-22 and 2023-24, banks recorded a compound annual growth rate (CAGR) of 17% in the housing loan segment, while housing finance companies (HFCs) grew at 12%.

As of March 2024, banks dominate the housing loan market with a 74.5% share, aided by cost advantages, widespread reach, and portfolio acquisitions. HFCs maintain a stable market share of 19%, with their loan portfolio expanding by 13.2% in 2023-24 to Rs. 9,60,000 crore (US$ 110.02 billion). The report estimates that HFCs will witness an annual growth of 12.7% in 2024-25 and 13.5% in 2025-26, with the retail segment driving expansion. A shift towards higher-ticket loans is evident, aligning with the premiumisation trend in India’s residential real estate market.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.