Banking Sector Capitalizes on Booming Indian Real Estate Market

user Admin
  • 8th May 2024
  • 1319
  • 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
1000 Crore Dollars Invested as Equity in Indian Real Estate in 2024 !! A Record-Breaking Achievement

2024: A Year of Record-Breaking Momentum in Indian Realty Investments Equity investments in India's real estate market are on the brink of crossing

General
NCR Construction Ban - Striking a Balance Between Progress and Pollution Control

Synopsis The construction ban in the National Capital Region (NCR) due to worsening air quality has raised concerns among industry leaders. While th

General
How Are Medium-Scale Developers Taking Advantage of the Indian Real Estate Revival with Agile Strategies?

The resurgence of mid-sized property developers in India showcases their ability to adapt to the evolving real estate landscape. After a period of dom