Outstanding home loans jumped to 11.2% of India’s GDP in FY23: Eco Survey

Outstanding home loans availed by individual buyers have seen massive jump in the past decade. The latest Economic Survey shows individual home loans have grown rapidly since 2011-12, beating the country’s gross domestic product (GDP) growth.

In 2011-12, outstanding home loans by individuals was little over Rs 5 lakh crore which crossed the Rs 10 lakh crore mark in 2014-15 and Rs 15 lakh crore mark in 2017-18. In 2023-24, shows the Economic Survey report, outstanding individual home loans stands well over Rs 30 lakh crore.

As a percentage of India’s GDP, the surge in outstanding home loans has recorded significant jump during this period. While in 2011-12, outstanding home loans availed by individuals was 6.6% of the GDP, in 2023-24 it has grown to 11.2% of the GDP.

“The rising demand for housing loans reflects the underlying demand for real estate. Housing loans as a percentage of GDP increased from FY12 to FY24. Traditionally, banks have been the most significant players in the housing finance sector. However, Housing Finance Companies (HFCs) have significantly contributed to this landscape over the years. They played a complementary role with banks in providing housing credit to the bottom of the pyramid,” it notes. The share of outstanding housing loans as a percentage of total loans of HFCs stood at 70.8% as of 31 March, 2024.

As per the report, in 2023, residential real estate sales in India were at their highest level since 2013, witnessing a 33 per cent year-on-year growth, with a total sale of 4.1 lakh units in the top eight cities. The new supply witnessed an all-time high, with 5.2 lakh units launched in 2023, as against 4.3 lakh units in 2022. The momentum continued in Q1 of 2024, witnessing record-breaking sales of 1.2 lakh units, clocking a robust 41 per cent YoY growth. New supply has consistently exceeded one lakh units since Q2 of 2022, underscoring persistent demand-supply dynamics in the housing market.