Bank Credit Outstanding To Housing and Commercial Real Estate Increases By 38% In July

Bank credit to housing and commercial real estate grew at a strong rate in July, the Reserve Bank of India revealed in it’s latest data. The realty sector witnessed about 38 percent growth in bank credit in the month of July, on an annual basis, the data noted. This growth took the loan outstanding to the realty sector to a record high of Rs 28 lakh crore. The data revealed the fast pace at which the real estate sector is growing across major cities on account of housing sales and new launches. 

Notably, the data showed that the credit outstanding in housing, inclusive of priority sector housing, grew by 37.4 percent on an annual basis in July and crossed Rs 24.28 lakh crore. The banking regulator’s data on ‘Sectoral Deployment of Bank Credit July 2023’ reflected a growth of 38 percent in credit outstanding to the commercial real estate sector, which stood at Rs 4.07 lakh crore.

Talking about the data, Anarock Chairman Anuj Puri told that the robust loan growth in the real estate sector is a result of large-scale demand revival everywhere. Notably, the commercial office sector has been under a lot of pressure since the pandemic due to employers considering work-from-home or hybrid model strategies. But the Chairman said that situation became normal once employees started resuming offices and good quality commercial offices became popular again in the year.

The bank’s data revealed that All India HPI growth went up by about 5 percent in the first quarter of the current fiscal year, up from 3.4 percent a year earlier. The segment recorded a growth of 4.6 percent in the last quarter of the previous year. Housing sales grew by 54 percent across top seven cities in 2022, on a year-on-year (YoY) basis, while sales already breached 63 percent of the previous year in the January-June period in 2023. 

The report noted that realty developers and consultants remained optimistic about the sales momentum in the sector to continue on account of the upcoming festive season. Krisumi Corporation’s managing director, Mohit Jain, said, “The festive season typically brings optimism and increased real estate transactions. The residential real estate sector is presently experiencing robust growth, and this trend is expected to persist". According to Anarock’s data, housing sales increased to 2,28,860 units during the first six months of the year across major cities, up from 1,84,000 units in the same period a year earlier. These major cities include Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Pune, and Kolkata.