Housing market cools as loan accounts plunge 42% in Dec qtr

Ahmedabad: Signs of a stagnancy in Gujarat's residential real estate market are becoming increasingly visible, with a sharp fall in the number of home loan borrowers even as total disbursals recorded a modest rise.According to the latest report of the State Level Bankers' Committee (SLBC) - Gujarat, the number of home loan accounts declined 42% year-on-year in the Dec quarter, dropping from 1.75 lakh to 1.01 lakh.
In contrast, fresh home loan disbursals rose marginally by 5%, increasing from Rs 15,211 crore to Rs 16,028 crore during the same period.Sector experts attribute the divergence to weak demand in the affordable and mid-income housing segments, coupled with a slowdown in new project launches. The data suggests that while fewer borrowers are availing home loans, those taking loans are opting for higher ticket sizes.Bank-wise trends in the SLBC report point to a shift in lending patterns. Several private sector banks trimmed their exposure to housing loans, while public sector banks increased disbursals in select pockets. The rise in overall loan value despite a steep drop in accounts indicates a clear jump in average ticket sizes, suggesting that credit growth is being driven more by high-value purchases than broad-based buyer participation.Data from the Gujarat Real Estate Regulatory Authority (GujRERA) also reflects moderation in supply. The state recorded 1,859 new project registrations in 2022-23, which fell to 1,715 in 2023-24. Registrations rose marginally to 1,822 in 2024-25, but in the current financial year so far, only 1,418 projects have been registered."The housing segments in the Rs 50-75 lakh bracket and at the higher end above Rs 5 crore continue to see steady demand. However, the mid-range ticket sizes, particularly in the Rs 2-3 crore segment, are witnessing a slowdown. Buyers are turning cautious and deferring big upgrades," a banker told TOI.Developers say residential markets across major cities in Gujarat are witnessing lower sales, with oversupply in key micro-markets leading to elevated unsold inventory. With demand remaining muted, many builders are adopting a wait-and-watch approach and holding back fresh launches.Viral Shah, secretary of CREDAI-Gujarat, said, "Affordable and mid-segment housing is struggling due to weak demand, whereas the premium housing segment is seeing better traction. As a result, the overall number of home loan takers has reduced significantly, but loans of higher value have increased. A potential rate cut by the Reserve Bank of India in the upcoming monetary policy could revive demand in the affordable and mid-income housing segments."Real estate analysts said sustained high property prices and cautious buyer sentiment have weighed on volumes, even as developers continue to see interest in larger, premium homes.(GFX sent to designers) Box: Lending Pattern Particulars (Dec QTR) 2024 2025 % Change Home Loan a/cs (in lakhs) 1.75L 1.01L -42 Loan Disbursals (Rs cr) 15,211 16,028 +5 Source: SLBC Gujarat