Outstanding individual housing loans have surged to over Rs 37 lakh crore by March 2025. This represents a rise in home loans as a percentage of GDP to over 11 percent. Government policies and initiatives have supported this expansion. Housing sales have also increased post-pandemic.
NEW DELHI: Housing finance has expanded at a steady pace with outstanding individual home loans rising nearly four times to Rs 37 lakh crore at the end of March 2025, according to the Economic Survey 2025-26.
The share of home-loans-to-GDP has grown to 11 per cent in 2024-25 from 8 per cent in 2015, it highlighted.
Housing sales have risen after the COVID pandemic, fuelling demand for home loans.
“The ‘real estate and ownership of dwellings’ sector has contributed about 7 per cent to annual GVA, on average, over the past decade, highlighting its importance in services-led growth and strong linkages with construction and financial services,” the report mentioned.
Over the last decade, the Survey highlighted that the government’s policy reforms, including the implementation of the Real Estate (Regulation and Development) Act (RERA), GST, and the Housing for All mission, have supported greater formalisation of the real estate sector.
Apart from that, the measures to boost housing demand, such as interest subvention under PMAY (Urban), the Affordable Housing Fund, lower interest rates, and streamlined credit processes, have strengthened access to housing finance.
Urban initiatives, such as the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF), have enhanced housing demand in Tier 2 and Tier 3 cities.
On the back of these reforms, the real estate sector entered a sustained upcycle from September 2021, post-COVID.
Housing sales improved, driven by higher household savings channelled towards physical assets.
The sales momentum has continued in recent quarters, supported by favourable affordability conditions and easing inflation.
Quoting real estate consultant PropTiger data, the Survey said that average housing volume sales continue to be higher than FY22-FY24.
“Housing finance also expanded steadily, with outstanding individual housing loans more than tripling from about Rs 10 lakh crore as at the end of March 2015 to over Rs 37 lakh crore at the end of March 2025, raising housing loans from 8 per cent to over 11 per cent of GDP, indicating a deeper financialisation of housing demand,” the survey said.
