Bank credit to the real estate sector, including residential and commercial real estate, witnessed nearly 38% annual growth in July 2023, taking the outstanding credit to Rs 28.35 lakh crore, according to the latest Reserve Bank of India (RBI) data. The credit outstanding to the commercial real estate increased by 38.1% to Rs 4.07 lakh crore. The credit outstanding in housing (including priority sector housing) rose 37.4% to Rs 24.28 lakh crore.
Another set of RBI data showed that the All-India HPI growth (y-o-y) inched up to 5.1% in Q1 FY24 from 4.6% in Q4 FY23 and 3.4% in Q1 FY23. Annual growth in HPI varied widely across the cities, ranging from a high growth of 14.9% in Delhi to a decrease of 6.6% in Kolkata. On a sequential (q-o-q) basis, All India HPI increased by 2.6% in Q1 FY24. Eight of the ten cities witnessed housing registration price increase vis-a-vis the previous quarter, the RBI said.
Aman Sarin, director and CEO, Anant Raj, told the media that growth in credit indicated that the sector was growing and people are investing in the sector. “This also indicates that the banking sector is positive about real estate and willing to provide capital for construction of commercial and housing projects,” Sarin said. A significant driver of housing demand is the rising importance of property ownership, buoyed by consumer confidence in the broader economic climate, he added.
