Bank credit outstanding to real estate rose to Rs. 28 lakh crore in July: RBI

RBI data shows loan outstanding to housing and commercial real estate rose 38% in July to Rs 28 lakh crore. Property consultants report housing sales and new launches across major cities are increasing, indicating demand revival.

Bank credit to housing as well as commercial real estate witnessed a nearly 38 per cent annual growth in July, taking the loan outstanding to the realty sector to a record Rs 28 lakh crore, as per the latest RBI data.

It is evident from the Reserve Bank's loan outstanding data as well as property consultants data on housing sales and new launches across major cities that the real estate sector is moving at a fast pace.

The credit outstanding in housing (including priority sector housing) rose 37.4 per cent annually in July crossing Rs 24.28 lakh crore, according to the RBI's data on 'Sectoral Deployment of Bank Credit – July 2023'.

The credit outstanding to commercial real estate increased by 38.1 per cent to Rs 4.07 lakh crore.

Commenting on the RBI data, Anarock Chairman Anuj Puri said the impressive loan growth in the real estate sector is a function of a large-scale demand revival across the board.

"The commercial office segment was reeling under the pandemic last year as employers studied strategies around complete work from the office, work from home, or a hybrid model. However, as the situation gained normalcy, employees returned to offices and the demand for good quality commercial offices is high this year," he said.

Another set of RBI data showed that All India HPI growth (y-o-y) inched up to 5.1 per cent in the first quarter of 2023-24 from 4.6 per cent in the previous quarter and 3.4 per cent a year ago.