Record credit surge: Credit extended to the housing sector has soared by nearly Rs 10 lakh crore over the past two fiscal years, hitting an unprecedented high of Rs 27.23 lakh crore in March 2024, as per the RBI's latest data on 'Sectoral Deployment of Bank Credit.'

Experts from the banking and real estate sectors attribute this surge in housing credit to a robust rebound in the residential property market post-COVID pandemic, driven by pent-up demand.

The RBI's data reveals that housing credit outstanding, including priority sector housing, surged to Rs 27,22,720 crore in March 2024, witnessing a significant rise from Rs 19,88,532 crore in March 2023 and Rs 17,26,697 crore in March 2022.

Additionally, credit extended towards commercial real estate stood at Rs 4,48,145 crore in March 2024, marking a notable increase from Rs 2,97,231 crore in March 2022.

Madan Sabnavis, Chief Economist at Bank of Baroda, attributed the surge in home loans to a booming housing market across all segments, particularly in the affordable housing sector, buoyed by government initiatives.

Sabnavis noted that pent-up demand following the COVID pandemic has also contributed to the increased demand for home loans.

While Sabnavis anticipates robust growth in home loans, he expects it to moderate to 15-20 percent due to a higher base.

Samir Jasuja, CEO and MD of PropEquity, emphasised that the surge in housing loans is driven by a significant increase in property launches and sales over the past two fiscal years. He highlighted substantial price appreciation in major Tier-1 cities, leading to larger average loan sizes per property.

(with PTI inputs)