Housing finance market to grow at 15-16% Compounded Annual Growth Rate (CAGR) through 2029-30: CareEdge

India’s housing finance market, currently valued at Rs. 33,00,000 crore (US$ 379.7 billion), is projected to grow at a 15-16% compound annual growth rate (CAGR) to reach Rs. 77,00,000-81,00,000 crore (US$ 886.1-932.3 billion) by 2029-30, according to CareEdge Ratings. The growth is driven by strong structural fundamentals and government incentives, making housing finance an attractive sector for lenders. The residential property market has expanded 74% since 2019, reaching 4.6 lakh units in 2024, reflecting high buyer confidence. Banks continue to dominate the housing loan segment, holding a 74.5% market share as of March 2024. Housing Finance Companies (HFCs) grew at 12% CAGR, maintaining a 19% market share. 

In FY24, HFCs’ loan portfolios grew by 13.2% to Rs. 9,60,000 crore (US$ 110.5 billion), aligning with CareEdge's 12-14% growth forecast. The sector is expected to see 12.7% and 13.5% YoY growth in FY25 and FY26, driven by strong equity inflows and capital reserves. The retail housing segment remains the key growth driver, while cautious expansion is observed in wholesale lending. Additionally, HFCs' asset quality has improved significantly, with gross non-performing assets (GNPA) falling to 2.2% in March 2024 from a peak of 4.3% in March 2022. These factors position the housing finance market for sustained expansion over the next decade. 

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