NEW DELHI: According to the Economic Survey 2025-26, housing finance has seen a significant expansion, with outstanding individual home loans increasing nearly fourfold to ₹37 lakh crore by the end of March 2025.
The share of home loans in relation to GDP grew from 8% in 2015 to 11% in 2024-25, indicating robust growth in this sector.
Post-COVID, housing sales have surged, further driving demand for home loans.
The report states, “The ‘real estate and ownership of dwellings’ sector has contributed approximately 7% to annual GVA on average over the past decade, underscoring its critical role in services-led growth and its strong connections with construction and financial services.”
Over the past ten years, the government’s policy reforms, including the introduction of the Real Estate (Regulation and Development) Act (RERA), GST, and the Housing for All mission, have facilitated greater formalization of the real estate sector.
Additionally, initiatives to boost housing demand, such as interest subsidies under PMAY (Urban), the Affordable Housing Fund, lower interest rates, and improved credit processes, have enhanced access to housing finance.
Urban initiatives like the Smart Cities Mission and the Urban Infrastructure Development Fund (UIDF) have also spurred housing demand in Tier 2 and Tier 3 cities.
Building upon these reforms, the real estate sector began a sustained upcycle in September 2021, following the pandemic.
Housing sales have improved due to elevated household savings being directed towards physical assets, and this trend has persisted in recent quarters, bolstered by favorable affordability conditions and declining inflation.
According to data from real estate consultant PropTiger, average housing sales volumes have remained higher than those from FY22 to FY24.
The survey noted that housing finance has also enjoyed steady growth, with outstanding individual housing loans increasing from approximately ₹10 lakh crore at the end of March 2015 to over ₹37 lakh crore by March 2025. This rise has elevated housing loans from 8% to over 11% of GDP, reflecting a deeper financialization of housing demand.
