Housing loan disbursals in Gujarat up 60% in a year to Rs 42,048 crore, ET RealEstate

June 23, 2023

AHMEDABAD: Many people in Gujarat are realizing their dream of owning a home. Despite rising property prices and interest rates, housing finance disbursals have surged by 60% in fiscal year 2023 compared to FY 2022. Fresh home loan disbursals reached Rs 42,048 crore during the fiscal year – a significant increase from Rs 26,299 crore in the previous year, according to data by the State Level Bankers’ Committee (SLBC).

The number of beneficiaries receiving fresh home loan disbursals also witnessed a substantial rise, jumping from 2.73 lakh to 4.26 lakh during the year, a 56% increase, as per the report.

Bankers and developers attribute the growth in home sales to customers’ desire to upgrade their homes and the positive sentiment prevailing in the real estate sector.

“Investment in real estate has experienced an upswing. Additionally, new projects are being launched to meet the demand. Since the lockdown, people have realized the importance of owning a new home or an additional property. This has boosted the inclination to purchase new homes,” revealed a source from SLBC Gujarat. “The demand for home loans has also increased due to the rising number of people buying second homes.”

Bankers also acknowledge the rise in home loan applications from young buyers. “Ahmedabad is now home to a significant number of young professionals with substantial disposable income. These customers, particularly salaried professionals, often invest in new homes for tax-saving purposes. Consequently, they frequently opt for home loans to save taxes, driving the demand,” explained an official from SLBC.

Property prices in different parts of Ahmedabad have escalated by 10-15% in the past year. In April 2022, the Confederation of Real Estate Developers’ Association of India (Credai) Ahmedabad chapter announced an increase of Rs 400-500 per square foot in Ahmedabad, which was followed by developers in other parts of the state.

Developers also attribute the surge in home demand to increased migration to Ahmedabad and the growing desire for new homes since the Covid-19 pandemic.

Ajay Patel, chairman of Credai Gujarat, said, “Residents of Ahmedabad, Gandhinagar, Vadodara, and Surat, are increasingly seeking an improved lifestyle by transitioning to larger, more spacious homes with better amenities. As a result, there is strong demand for high-end properties across all major cities in the state. New projects with enhanced amenities such as swimming pools, gyms, and jogging parks are being developed, further driving the demand.”

Developers point to the influx of young professionals from other states into Gujarat as a factor driving the demand for new homes. Increased investments in GIFT City have also attracted numerous young professionals to migrate to Ahmedabad and Gandhinagar, leading to exponential growth in property demand in these areas.

“Many individuals are migrating to Ahmedabad from northern Gujarat, Saurashtra, Charotar, and other nearby regions in search of better work opportunities and quality of life. Affluent individuals settled in these regions are investing in real estate in Ahmedabad, contributing to the demand for new homes,” explained Patel.

  • Published On Jun 7, 2023 at 08:47 AM IST

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