Growth Of Home Loan Market Is Good News For Buyers

Pent-up demand, lower interest rates, favourable government incentives, and discounts by developers have helped the home loan sector grow. Here’s why this is a positive signal for aspiring home-buyers

- Shehzin Shaikh

As per data released by CRIF High Mark, one of the leading credit bureaus in India, the housing loan market has grown at a three-year CAGR of 6.5 per cent. Also, active housing loan borrowers’ base as of December 2020 is nearly five per cent higher than pre-pandemic levels (December 2019).

It is practically impossible to buy a house, and often, even upgrade to a bigger house without a home loan. This is because, by the time most people build up enough savings to buy a house, the inflation rate makes the property even more expensive. Hence, a home loan allows an individual to buy a house with smaller savings at hand. Besides, the pandemic reinforced the idea that the safest place to be at is one’s own home. “Real estate, especially homeownership, is considered safer than the volatility of financial markets. With home loan rates at a multidecadal low and the developers offering indirect discounts/ freebies, the weighted average prices have reduced substantially; thus home-buyers are taking the plunge using the home loan route,” says Vipul Jain, head of products, CRIF High Mark.

Affordable housing drives demand