India Housing Loan Market By Size, Trends, Developments & Forecast 2029

Summary

Report Description

Forecast Period	2025-2029
Market Size (2023)	USD322 Billion
CAGR (2024-2029)	9.24%
Fastest Growing Segment	NBFCs
Largest Market	North India

India housing loan market is projected to grow through the forecast period, aided with the rise in demand for ready-to-move in houses, projects by established and trusted developers, increasing demand in the mid-to-luxury segment, growing desire for home ownership, and entry of newer players in the market.

India Housing Loan Market Scope

A housing loan or home loan is a secured loan that is obtained to purchase a property by offering something as collateral against a loan to purchase house. This housing loan offers low-interest, long-term, and high-value funding. They are repaid through equated monthly instalment (EMI) and after repayment and ownership of the property returns to the borrower. Financial institutions offer home loans, not only for buying a house but also for a variety of other purposes, which include loans for purchase of land, loans for home purchase, loans for construction of a house, house expansion or extension loans, loans for home improvement, and many others. In India, housing loan is offered by banks and housing finance companies (HFCs). The loan amount and tenure vary depending on the lender and the borrower's eligibility. Generally, the interest rate on the loan amount can be up to 10% or more than 10%, and the tenure can extend up to 30 years.

India Housing Loan Market Overview

The housing loan market in India refers to the financial sector that provides loans to individuals and companies for the purchase or construction of housing. It plays a major role in the economy of this country as it enables people to fulfill their dreams of owning a home. The housing loan market in India is dominated by banks, both public and private sector banks, as well as housing finance companies (HFCs). Some of the leading lenders include State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, LIC Housing Finance, and Indiabulls Housing Finance, among others. The interest rates can be fixed or floating, on housing loans in India and are influenced by various factors which includes the borrower's creditworthiness, the loan amount, tenure, and prevailing market conditions.

According to State Bank of India’s economic research report 2022 “Ecowrap”, India’s home loan market, valued at about USD 322 billion, is expected to double in the next 5 years, with mortgage to GDP ratio rising commensurately from current 11 percent. Moreover, SBI’s Economic Research Department (ERD) noted the total home loan portfolio grew by 10 percent in FY22, with districts in tier-3 and tier-4 areas growing at a much faster rate than tier-1 and tier-2 districts, post pandemic, expanding the home loan market in India.

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India Housing Loan Market Drivers

With India’s rapidly growing population, and urbanization, more and more people are looking for housing. This has led to an increase in demand for housing loans as individuals and families for purchase or to construct home. Moreover, in recent years, India has witnessed a steady increase in disposable incomes, driven by factors such as economic growth, urbanization, and a rising middle class. This has also enabled people to afford homes and has fueled the demand for housing loans in India during the forecasted period. Additionally, the government of India has also launched various initiatives and policies to promote affordability in housing ownership and expanding housing loan. For instance, under the scheme Pradhan Mantri Awas Yojana (PMAY), the urban poor by the year 2024 will have been provided with incentives and subsidies for homebuyers, particularly in the affordable housing segment. These initiatives have encouraged more people to avail housing loans. Moreover, Indian banks and financial institutions are making housing loans more accessible and attractive, by offering competitive interest rates, flexible repayment options, and simplified loan approval processes. This makes it easier for individuals to finance home purchases and contributes to the increased demand for housing loans in India, which will expand the market of housing loan in India during the forecasted years.

India Housing Loan Market Trends

The housing loan market in India is continuously evolving, and several new trends have emerged in recent times. There is an increasing focus on affordable housing, aimed at addressing the housing needs of low- and middle-income families. Lenders are offering special loan products and interest rate subsidies under government programs such as Pradhan Mantri Awas Yojana (PMAY), to promote affordable housing. Moreover, there has been a significant shift towards digitization in the Indian housing loan sector. Many lenders are now offering online loan apps, digital documents, electronic signatures, and an online loan application. This trend has made the loan process more efficient and convenient for borrowers, driving the India housing loan market in India during the forecasted period.

In addition, lenders are offering more flexible loan options to meet the needs of different borrowers. For instance, there are step-up loan options where EMIs start from lower starting points and go up gradually, which is suitable for borrowers expecting their income to increase in the future. Also, the housing loan market is expected to grow in the forecast period in India. In addition, lenders are increasingly providing customized loan offers to the individual borrowers, considering factors such as profile, disposable income, creditworthiness, and eligibility criteria. This trend provides borrowers with access to loan terms that are personalized to the individual needs. Thus, these trends are boosting the market of housing loan market in India.

India Housing Loan Market Challenges

One of the fastest growing loans in India is housing loan and housing finance companies have a big role in addressing the housing shortage in India. However, various challenges are restraining the growth of the housing loan in India. As with housing loans, the borrower has to pay EMI with interest on a monthly basis or else additional interest will be charged to consumers.

One of the challenges faced by the customers is the collection of documents from different offices. The various documents required for home loan are approved lay out plan, salary certificate, and building construction plan approved by corporation or development authority, etc. Collecting the aforementioned documents from various locations require a significant amount of time and, to a lesser extent, financial resources, which is a particular issue for employees who find it difficult to find the time to visit the office to collect the documents. In general, housing loan borrowers don’t know much about housing finance, and tend to choose the company at random. However, after taking out the loan, the borrower has to deal with hidden charges such as processing charges, late payment fees, pre-mature payment fees, interest rate conversion fees, etc. Thus, these above challenges are some of the factors that are hindering the growth of the market in India.

Market Recent Developments

In 2021, an AI-enabled fintech platform Easiloan, raised USD 0.98 million from Tomorrow Capital for home loans. This funding will be utilized by Easiloan to enhance its digital only product offerings, by acquiring new customers, and activate new products in the Indian home loan market.
In 2022, private sector lender HDFC Bank announced to complete its planned merger with Housing Development Finance Corp. Ltd., ahead of time by the first quarter of FY24 instead of the original target of the third quarter.

Market Opportunities

India's middle class is growing rapidly, and more and more people are looking to buy a home. That means lenders have plenty of chances to offer home loans to meet the needs of buyers. As more and more people live in cities, there's a need for affordable homes. Home lenders can reach out to this group by offering loans with lower interest rates or longer maturities. Plus, with the help of technology, lenders can make the loan process faster and more efficient. They can also use digital platforms and apps to make the application and approval process easier and more attractive to tech-savvy customers.

India is an emerging country with a fast-growing middle class, having desire to own a home. This can be an opportunity for lenders offering home loan to buyers meeting the needs of both lender and buyer. Hence, with the growing urban population, the demand for home loans has increased at affordable prices. Thus, home lenders can focus on this segment by providing home loans at lower rates or with extended loan maturities.
The increasing technology in the lending industry has increased the speed and efficiency of loan processing. Thus, lenders can use digital platforms and mobile apps to provide a smooth housing loan application and approval process to attract tech-savvy clients.

India Housing Loan Market Segmentation

The India Housing Loan market is segmented on the basis of type, customer type, source, interest rate, tenure and region. On the basis of type, the market is fragmented into home purchase, land/ plot purchase, home construction, home improvement, home extension, and others. On the basis of customer type, the market is segmented into salaried, self-employed. On the basis of source, the market is segmented into Bank, Housing Finance Companies (HFCs). The market is fragmented into below 10%, above 10% on the basis of interest rate. On the basis of tenure, the market is segmented into below 5 years, 5 to below 10 years, 10 to 20 years, and above 20 years. On the basis of region, the market is divided into North, South, East, and West.

Company Profiles

Housing Development Finance Corporation Limited, LIC Housing Finance Limited, Indiabulls Housing Finance Limited, L&T Housing Finance Limited, PNB Housing Finance Limited, Tata Capital Housing Finance Limited, State Bank of India, Bajaj Housing Finance Limited, IIFL Housing Finance Limited, Can Fin Homes Ltd are some of the major players in the India housing loan market.

Attribute	Details
Base Year	2022
Historic Data	2019 – 2022
Estimated Year	2024
Forecast Period	2025 – 2029
Quantitative Units	Value in USD Million, CAGR for 2019-2023 and 2024-2039
Report Coverage	Revenue forecast, company share, competitive landscape, growth factors, and trends
Segments Covered	Type Customer Type Source Interest Rate Tenure Region
Regional scope	North, South, East, West
Key Companies Profiled	Housing Development Finance Corporation Limited, LIC Housing Finance Limited, Indiabulls Housing Finance Limited, L&T Housing Finance Limited, PNB Housing Finance Limited, Tata Capital Housing Finance Limited, State Bank of India, Bajaj Housing Finance Limited, IIFL Housing Finance Limited, Can Fin Homes Ltd
Customization scope	10% free report customization with purchase. Addition or alteration to country, regional & segment scope.
Pricing and purchase options	Avail customized purchase options to meet your exact research needs. Explore purchase options
Delivery Format	PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

Report Scope:

In this report, India housing loan market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

India Housing Loan Market, By Type:

Home Purchase
Land/ Plot Purchase
Home Construction
Home Improvement
Home Extension
Others

India Housing Loan Market, By Customer Type:

Salaried
Self-Employed

India Housing Loan Market, By Source:

Bank
Housing Finance Companies (HFCs)

India Housing Loan Market, By Interest Rate:

Below 10%
Above 10%

India Housing Loan Market, By Tenure:

Below 5 Years
5 to below 10 Years
10 to 20 Years
Above 20 Years

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in India Housing Loan market.

Available Customizations:

With the given market data, TechSci Research offers customizations according to a company’s specific needs. The following customization options are available for the report:

Company Information

Detailed analysis and profiling of additional market players (up to five).

India Housing Loan Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]

Table of content

1. Introduction

1.1. Product Overview

1.2. Key Highlights of the Report

1.3. Market Coverage

1.4. Market Segments Covered

1.5. Research Tenure Considered

2. Research Methodology

2.1. Objective of the Study

2.2. Baseline Methodology

2.3. Key Industry Partners

2.4. Major Association and Secondary Sources

2.5. Forecasting Methodology

2.6. Assumptions and Limitations

3. Executive Summary

3.1. Market Overview

3.2. Market Forecast

3.3. Key Regions

3.4. Key Segments

4. Voice of Customer Analysis (B2C Model Analysis)

4.1. Respondent Demographics

4.1.1. By Gender

4.1.2. By Age

4.1.3. By Occupation

4.2. Brand Awareness

4.3. Factors Influencing Purchase Decision

4.4. Challenges Faced

5. India Housing Loan Market Outlook

5.1. Market Size & Forecast

5.1.1. By Value

5.2. Market Share & Forecast

5.2.1. By Type Market Share Analysis (Home Purchase, Land/ Plot Purchase, Home Construction, Home Improvement, Home Extension, Others)

5.2.2. By Customer Type Market Share Analysis (Salaried, Self-Employed)

5.2.3. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

5.2.4. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

5.2.5. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

5.2.6. By Region Market Share Analysis

5.2.6.1. North India Market Analysis

5.2.6.2. South India Market Analysis

5.2.6.3. East India Market Analysis

5.2.6.4. West India Market Analysis

5.3. India Housing Loan Market Mapping & Opportunity Assessment

5.3.1. By Type Market Mapping & Opportunity Assessment

5.3.2. By Customer Type Market Mapping & Opportunity Assessment

5.3.3. By Source Market Mapping & Opportunity Assessment

5.3.4. By Interest Rate Market Mapping & Opportunity Assessment

5.3.5. By Tenure Type Market Mapping & Opportunity Assessment

5.3.6. By Regional Market Mapping & Opportunity Assessment

6. India Home Purchase Housing Loan Market Outlook

6.1. Market Size & Forecast

6.1.1. By Value

6.2. Market Share & Forecast

6.2.1. By Customer Type Market Share Analysis (Salaried, Self-Employed)

6.2.2. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

6.2.3. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

6.2.4. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

7. India Land/ Plot Purchase Housing Loan Market Outlook

7.1. Market Size & Forecast

7.1.1. By Value

7.2. Market Share & Forecast

7.2.1. By Customer Type Market Share Analysis (Salaried, Self-Employed)

7.2.2. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

7.2.3. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

7.2.4. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

8. India Home Construction Housing Loan Market Outlook

8.1. Market Size & Forecast

8.1.1. By Value

8.2. Market Share & Forecast

8.2.1. By Customer Type Market Share Analysis (Salaried, Self-Employed)

8.2.2. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

8.2.3. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

8.2.4. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

9. India Home Improvement Housing Loan Market Outlook

9.1. Market Size & Forecast

9.1.1. By Value

9.2. Market Share & Forecast

9.2.1. By Customer Type Market Share Analysis (Salaried, Self-Employed)

9.2.2. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

9.2.3. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

9.2.4. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

10. India Home Extension Housing Loan Market Outlook

10.1. Market Size & Forecast

10.1.1. By Value

10.2. Market Share & Forecast

10.2.1. By Customer Type Market Share Analysis (Salaried, Self-Employed)

10.2.2. By Source Market Share Analysis (Bank & Housing Finance Companies (HFCs))

10.2.3. By Interest Rate Market Share Analysis (Below 10%, Above 10%)

10.2.4. By Tenure Market Share Analysis (Bank & Housing Finance Companies (HFCs))

11. Market Dynamics

11.1. Drivers

11.1.1. Increased Demand for Purchase or Construct Homes

11.1.2. Rising Government Initiatives and Policies

11.1.3. Easy Availability of Housing Loans

11.2. Challenges

11.2.1. High Competition

11.2.2. Lengthy Approval Process of Documentation

12. Impact of COVID-19 on India Housing Loan Market

12.1. Impact Assessment Model

12.1.1. Key Segments Impacted

12.1.2. Key Regions Impacted

13. Market Trends & Developments

13.1. Tax Benefits Offered by Indian Government On Housing Loans

13.2. Changing Lifestyles and Aspirations

13.3. Digitalization and Online Processes

13.4. Availability of Customized Loan Offers

13.5. Popularity of Co-lending and Partnerships

14. Porter’s Five Forces Model

14.1. Competitive Rivalry

14.2. Bargaining Power of Buyers

14.3. Bargaining Power of Suppliers

14.4. Threat of New Entrants

14.5. Threat of Substitutes

15. SWOT Analysis

15.1. Strengths

15.2. Weaknesses

15.3. Opportunities

15.4. Threats

16. Policy & Regulatory Landscape

17. India Economic Profile

18. Competitive Landscape

18.1. Company Profiles

18.1.1. Housing Development Finance Corporation Limited

18.1.1.1. Company Details

18.1.1.2. Product & Services

18.1.1.3. Financials (As Per Availability)

18.1.1.4. Key market Focus & Geographical Presence

18.1.1.5. Recent Developments

18.1.1.6. Key Management Personnel

18.1.2. LIC Housing Finance Limited

18.1.2.1. Company Details

18.1.2.2. Product & Services

18.1.2.3. Financials (As Per Availability)

18.1.2.4. Key market Focus & Geographical Presence

18.1.2.5. Recent Developments

18.1.2.6. Key Management Personnel

18.1.3. Indiabulls Housing Finance Limited

18.1.3.1. Company Details

18.1.3.2. Product & Services

18.1.3.3. Financials (As Per Availability)

18.1.3.4. Key market Focus & Geographical Presence

18.1.3.5. Recent Developments

18.1.3.6. Key Management Personnel

18.1.4. L&T Housing Finance Limited

18.1.4.1. Company Details

18.1.4.2. Product & Services

18.1.4.3. Financials (As Per Availability)

18.1.4.4. Key market Focus & Geographical Presence

18.1.4.5. Recent Developments

18.1.4.6. Key Management Personnel

18.1.5. PNB Housing Finance Limited

18.1.5.1. Company Details

18.1.5.2. Product & Services

18.1.5.3. Financials (As Per Availability)

18.1.5.4. Key market Focus & Geographical Presence

18.1.5.5. Recent Developments

18.1.5.6. Key Management Personnel

18.1.6. Tata Capital Housing Finance Limited

18.1.6.1. Company Details

18.1.6.2. Product & Services

18.1.6.3. Financials (As Per Availability)

18.1.6.4. Key market Focus & Geographical Presence

18.1.6.5. Recent Developments

18.1.6.6. Key Management Personnel

18.1.7. State Bank of India

18.1.7.1. Company Details

18.1.7.2. Product & Services

18.1.7.3. Financials (As Per Availability)

18.1.7.4. Key market Focus & Geographical Presence

18.1.7.5. Recent Developments

18.1.7.6. Key Management Personnel

18.1.8. Bajaj Housing Finance Limited

18.1.8.1. Company Details

18.1.8.2. Product & Services

18.1.8.3. Financials (As Per Availability)

18.1.8.4. Key market Focus & Geographical Presence

18.1.8.5. Recent Developments

18.1.8.6. Key Management Personnel

18.1.9. IIFL Housing Finance Limited

18.1.9.1. Company Details

18.1.9.2. Product & Services

18.1.9.3. Financials (As Per Availability)

18.1.9.4. Key market Focus & Geographical Presence

18.1.9.5. Recent Developments

18.1.9.6. Key Management Personnel

18.1.10. Can Fin Homes Ltd

18.1.10.1. Company Details

18.1.10.2. Product & Services

18.1.10.3. Financials (As Per Availability)

18.1.10.4. Key market Focus & Geographical Presence

18.1.10.5. Recent Developments

18.1.10.6. Key Management Personnel

19. Strategic Recommendations/Action Plan

19.1. Key Focus Areas

19.2. Target Regions

19.3. Target Type

20. About Us & Disclaimer

Figures and Tables

Frequently asked questions

What are the drivers in the India Housing Loan market?

The increasing population, rising shift of people towards cities by purchasing homes through home loan, and government’s initiative for affordable housing are driving the housing loan market in India.

What are the trends driving the India Housing Loan market?

The increasing need to move into larger residences, younger borrowers of housing loans, increased need for independent homes, government programmes to provide cheap housing, among others, are some of the trends that are boosting the demand of housing loan in India.

What are the challenges of Global Online Event Ticketing market?

Inadequate infrastructural development, high cost of land acquisition, and non-availability of long-term capital for investment, are some of the challenges hindering the growth of the market.

Who are the key players in the Global Online Event Ticketing market?

Some key players operating in the India Housing Loan market include Housing Development Finance Corporation Limited, LIC Housing Finance Limited, Indiabulls Housing Finance Limited, L&T Housing Finance Limited, PNB Housing Finance Limited, Tata Capital Housing Finance Limited, State Bank of India, Bajaj Housing Finance Limited, IIFL Housing Finance Limited, Can Fin Homes Ltd.

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Srishti Verma

Business Consultant

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Press Release

India Housing Loan Market to be Dominated by Banks Segment During the Forecast Period

Jul, 2023

Offering tax deduction by government on the principal amount, along with the interest paid and longest repayment tenure on home loan will drive the India housing loan market in the forecasted years.

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