Housing Loans Rose 14% in India: Positive Outlook by NHB Report

The National Housing Bank (NHB), a statutory body under the Government of India, has released its comprehensive report titled “Trends and Progress of Housing in India, 2024.”

The report primarily comprises valuable insights into the current housing landscape, including house price trends, flagship government programs, the role of lending institutions, the performance of Housing Finance Companies (HFCs) and the outlook for the sector. In this read, we will have a look at the key highlights of the report:

Growth in Individual Housing Loans

As of September 30, 2024, individual housing loans stood at a remarkable ₹33.53 lakh crore, marking a 14% increase over the same period in the previous year. This growth reflects the increasing demand for homeownership and the country’s overall economic growth, with lending institutions playing a critical role in facilitating this demand.

Distribution of Housing Loan Categories

The distribution of individual housing loans shows a balanced spread across different income groups:

• EWS & LIG (Economically Weaker Section & Lower Income Group): 39% of total housing loans
• MIG (Middle-Income Group): 44% of total housing loans
• HIG (Higher Income Group): 17% of total housing loans

This distribution underscores the significant role that affordable housing plays in India’s broader housing market, while also highlighting the growing middle-class demand.

Housing Loan Disbursements

During the first half of 2024 (ending September 30), housing loan disbursements amounted to ₹4.10 lakh crore. In the previous financial year (ending March 31, 2024), the total disbursements reached ₹9.07 lakh crore. These figures reflect strong lending activity, driven by both demand for housing and government initiatives that make home loans more accessible.

Housing Price Index Trends

The Housing Price Index (NHB-RESIDEX), which tracks the price movements of residential properties, showed a year-on-year increase of 6.8% for the quarter ending September 2024, up from 4.9% the previous year. This rise in housing prices is reflective of both increased demand and higher construction costs, which have been impacting the market.

Government Initiatives and Programs

The report delves into the significant government initiatives designed to support housing development in India. Some of the flagship programs include:

• Pradhan Mantri Awas Yojana – Gramin (PMAY-G): Targeting rural housing needs
• Pradhan Mantri Awas Yojana – Urban (PMAY-U): Focusing on urban housing for the underprivileged
• Impact Assessment of PMAY-U: Evaluation of the impact of this key initiative on the housing sector
• Urban Infrastructure Development Fund (UIDF): Aimed at financing infrastructure projects
• Affordable Rental Housing Complexes (ARHC) Scheme: Addressing the demand for rental housing

Outlook for the Housing Sector

The future of India’s housing sector looks promising, fueled by several key factors:

• PMAY 2.0 and Budget Announcements: The government’s continued focus on affordable housing, particularly through PMAY 2.0, will drive demand.
• Urbanisation and Transit-Oriented Development: As more people move to urban areas, there will be an increasing need for well-planned housing developments close to transit hubs.
• Digitisation: The growing use of digital platforms in property transactions and land management is expected to further facilitate sector growth.

Conclusion

The housing sector in India is on a steady growth trajectory. With significant government support, the role of financial institutions, and technological advancements, the sector is well-positioned to meet the rising demand for homes across the country.

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