For buying homes and commercial properties grew by nearly 38% in July, reaching a record Rs 28 lakh crore, according to recent data from the Reserve Bank of India (RBI).
This data, coupled with information from property consultants on increased housing sales and new property launches in major cities, highlights the fast-paced activity in the real estate sector.
Specifically, outstanding credit for housing, including priority sector housing, increased by 37.4% annually in July, crossing Rs 24.28 lakh crore. Meanwhile, credit for commercial real estate grew by 38.1% to Rs 4.07 lakh crore.
Anuj Puri, Chairman of Anarock, explained that this impressive loan growth is due to a significant demand revival across the board. He noted that the commercial office segment had faced challenges during the pandemic but has rebounded as employees returned to offices, increasing the demand for quality commercial spaces.
Additionally, RBI data indicated a year-on-year growth of 5.1% in the All India House Price Index in the first quarter of 2023-24, reflecting sustained demand. Puri pointed out that housing sales across the top seven cities in India were 54% higher in 2022 than the previous year. In the first half of 2023, sales had already reached 63% of the previous year’s total, indicating continued strong demand.
Mohit Jain, Managing Director
Of Krisumi Corporation, noted that the festive season typically brings optimism and increased real estate transactions. Overall, industry experts expect the real estate sector to continue its robust growth.
The growth in credit indicates confidence in the real estate sector, with banks willing to provide capital for both commercial and housing projects. Despite rising interest rates on home loans and increased property prices, the real estate market remains resilient.
Samantak Das, Executive Director and Head of Research at JLL India, highlighted the remarkable growth in bank lending to the real estate sector in July 2023 according to RBI’s latest sectoral credit data.