Credit outstanding to the housing sector rose nearly ₹10 lakh crore in the last two fiscals to reach a record ₹27.23 lakh crore (trillion) in March this year, according to RBI’s data on ‘Sectoral Deployment of Bank Credit’.

Experts from banking and real estate sectors attributed this growth in housing credit outstanding to a strong revival in the residential property market post-Covid pandemic on pent-up demand.

According to the data of the Reserve Bank of India (RBI) on sectoral deployment of bank credit for March 2024, the credit outstanding to the housing (including priority sector housing’) stood at ₹27,22,720 crore in March 2024, up from ₹19,88,532 crore in March 2023, and ₹17,26,697 crore in March 2022.

The data also showed that the credit outstanding towards commercial real estate stood at ₹4,48,145 crore in March 2024. It was at ₹2,97,231 crore in March 2022.

According to reports from various property consultants, housing sales and prices have surged significantly in the past two financial years.

When contacted, Madan Sabnavis, chief economist with Bank of Baroda, said the high growth in home loans can be attributed to the housing boom seen across all segments.

In particular, Sabnavis said the affordable housing segment has witnessed an uptick due to the government push.

“There was also some pent-up demand for buying homes in the last two years following Covid which is getting reflected here,” he said.

Sabnavis said the home loan growth would remain robust, but might taper down to 15-20 per cent due to a higher base.

Commenting on the RBI data, Samir Jasuja, CEO and MD of PropEquity, a leading real-estate data and analytics company, said the rise of housing loans outstanding is primarily due to the significant increase in the quantum of properties launched and sold in the last two fiscal years.

“Major Tier-1 cities have witnessed high rates of price appreciation ranging between 50-100 per cent since 2020-21,” he explained.