Banking Sector Capitalizes on Booming Indian Real Estate Market

user Admin
  • 8th May 2024
  • 1310
  • 0
Banking Sector Capitalizes on Booming Indian Real Estate Market
Never miss any update
Join our WhatsApp Channel

Bank lending to commercial real estate, including residential construction, soared last fiscal year, recording a 23% growth rate excluding the effects from the HDFC and HDFC Bank merger. The outstanding loans reached Rs 3.97 lakh crore. When accounting for the merger, growth escalated to 38.9%, with outstanding loans totaling Rs 4.48 lakh crore as of March 31.

Analysts highlight that the real estate sector is expanding across various segments. The top seven property markets in the country saw a total of 74,486 apartments sold during the quarter, marking this as the second consecutive quarter where sales surpassed 74,000 units, following a record 75,591 apartments sold in the previous December quarter, according to data from JLL India.

Banks are seeing a robust demand for loans spanning residential, infrastructure-centric projects, and commercial endeavors such as corporate offices. Despite their cautious approach to residential project financing, banks are adapting due to the enhanced transparency and regulatory clarity provided by RERA, which has boosted stakeholder confidence and streamlined approval processes. This regulatory framework has made it easier for developers to deliver projects timely.

The dedication of reputable developers to meet deadlines and uphold quality standards is vital in drawing more institutional funding to the sector. Continued efforts to enhance transparency, ensure robust project execution, and provide strategic regulatory support are crucial for maintaining this trust.

Real estate analysts commend banks for their careful risk assessment practices, particularly with residential projects, which aligns with the long-term vision for a balanced and resilient real estate sector. Crisil noted that ongoing premiumisation and favorable affordability, coupled with rising per capita incomes, are poised to support large, listed residential developers in achieving a 10-12% volume growth this fiscal year, following an estimated 14% growth on a high base in fiscal 2024.

India-Ratings forecasts a 5%-6% yearly growth in new supply and absorption rates, and 7%-8% in absorption demand, driven mainly by sectors like flex operators, BFSI, and engineering seeking Grade A office spaces in FY’25.


Related Topics / Tags

Admin

Author

Admin

...


Comments

Add Comment

No comments yet.

Add Your Comment

Relevant Blogs

General
Excelerate 3.0 by NAREDCO Maharashtra NextGen - Exploring Innovation in Indian Construction and Real Estate

The Ultimate Innovation Platform for Construction and Real Estate in India Get ready for the most anticipated real estate event of the year! NAREDCO

General
5 Reasons Why JARDIN by Oberoi Realty at Oberoi Garden City Thane Is a Resounding Success

Oberoi Realty’s latest launch JARDIN at Oberoi Garden City Thane, has taken the real estate market by storm, recording Rs 1,348 crore in booking

General
Reimagining Khotachi Wadi - Safeguarding Mumbai's Hidden Heritage Amidst Urban Transformation

In an insightful panel discussion, longtime residents, archaeologists, and cultural curators delved into the historical essence, architectural beauty,