Housing Finance Market Could Double To Rs 81 Lakh Crore
MUMBAI, India — India’s housing finance market might reach Rs 81 lakh crore in five years, according to experts. This is from the new report from CareEdge Ratings, released on March 5, 2025. Why? Robust demand and government assistance are driving home loans up.
Big Growth on the Way
It says the market will be a fast-growing one — some 15-16% yearly to 2029-30. That’s known as a compound annual growth rate, or CAGR. Currently, the market is at ₹33 lakh crore. With this, if it doubles it can reach Rs 77 lakh crore to Rs 81 lakh crore by 2030. This growth is occurring at a time when more people want homes, particularly in cities.
CareEdge Ratings cites good reasons for this. India has a young and growing population. People are increasingly moving to urban centers. Plus, the government is pitching in Programs like Pradhan Mantri Awas Yojana (PMAY) make loans cheaper. The Reserve Bank of India (RBI)’s lower interest rates help, too. Together, they ignite a home-buying boom.
Banks, HFCs Take the Lead
This market is largely dominated by two players: Banks and Housing finance companies (HFCs). Between 2021 to 2024, banks expanded their home loans by 17% per annum. HFCs grew at 12%. HFC loans crossed Rs 9.6 lakh crore in FY 2024 — it was up 13.2% against the prior year. The outperformance has come from banks like HDFC and ICICI, while HFCs such as LIC Housing Finance have lagged.
What’s fueling this? Buyers trust the market. Home sales surged 74% compared to 2019 and touched a level of 4.6 lakh units in 2024. “There is a strength in the residential properties market,” said Geeta Chainani, Associate Director, CareEdge Ratings. “It’s a major driver of housing finance.” Smaller loans (those less than Rs 30 lakh) represent 53% of HFC business, but bigger loans are growing too.
The government adds muscle. As of June 2023, PMAY-U has constructed 74.75 lakh houses for the urban poor. Budget-2024-25 promises a 1 crore families’ housing cost of Rs 10 lakh croreHarga. That’s a small readjustment for lenders. The RBI, on the other hand, maintains low rates — 4% as of October 2021 — making loans cheap.
Hurdles May Slow Things Down
It’s not all smooth sailing. Affordability is a worry. “Over the past five years, housing prices have soared 88%,” TimesProperty reports. In Gurugram, it spent up 160% to Rs 19,500 allied from Rs 7,500 per retardate. At 37 per cent, Mumbai is a top-level slo-mo market, but still the priciest in India. Appendix: Some Big Issues in the Way of the High Plains Buying Boom
Liquidity is another hitch. Some lenders got cash-starved following the 2018 IL&FS crisis. COVID-19 took a toll as well, sapping growth in 2019. Loans against affordable housing — below Rs 25 lakh — saw a much lower growth of 4.1% during that year. Yet the market rallied back. Cash injection and reserves will see HFCs grow by 12.7% in 2025 and 13.5% in 2026.
Market swings matter too. NSDL Says Foreign Investors Withdraw Rs 1,13,721 Crore From Indian Stocks In 2025 So Far If that continues, it could dent confidence.” So is housing finance, experts say. Needs for homes remain consistent, particularly in the retail sector.
What’s Next for Home Buyers?
This growth has the potential to transform lives. More loans mean more homes. Hitting Rs 81 lakh crore market could make millions property owners. New housing hubs could emerge in cities like, Delhi, Mumbai, and, Bengaluru. Developers might be able to bring more projects to market, especially low-income options.
For lenders, it’s a pitch perfect opportunity. New loan offers could be announced by banks and HFCs. Think better rates or longer repayment periods. But they’ll have to be on guard against risks — such as defaults or price bubbles. The RBI will intervene if things start looking hot. Buyers should act smart too. And with prices up, locking in a loan could potentially save some money soon.
The path to Rs 81 lakh crore is looking bright. Buyer demand matters, as does government support. If it all works out, India’s housing market may be twice as large by 2030. That’s huge news for anyone with home ownership dreams. Stay tuned — the next five years might well define how Indians live.
References:
- Economic Times: Housing finance market to grow at 15-16% CAGR through 2029-30
- Business Standard: Individual housing finance market to grow to Rs 77-81 trn by FY30
- TimesProperty: Indian Housing Prices Surge 88% in Just 5 Years
- IBEF: Discover Key Insights into the Indian Real Estate Sector in 2024
- Zee News: India’s Housing Finance Market Poised To More Than Double