The housing finance market in Gujarat is facing a paradox – fewer people are borrowing, but those who are borrowing are borrowing in larger amounts. According to the latest State Level Bankers Committee (SLBC) report, the number of home loan borrowers saw a sharp decline of 39.6%, from 1.58 lakh accounts in the September quarter of FY24 to just 95,532 accounts in the same period of FY25.
Despite the sharp decline in loan accounts, total disbursements grew by 32%, led by a remarkable 118% increase in loan ticket size – from Rs 6.82 lakh to Rs 14.93 lakh per account. This trend clearly indicates that affordable housing demand has lagged behind, while high-value properties continue to hog the limelight. While high-value properties are shining, the absence of affordable buyers indicates an uneven economic landscape. The number of home loan borrowers in Gujarat has declined for the second consecutive quarter. According to the SLBC report, around 1.01 lakh people availed home loans in the June quarter of FY25, as against 1.5 lakh borrowers in the same quarter of FY24.
“The decline in the number of housing loan borrowers reflects a change in market dynamics, as demand in the housing sector is currently subdued. This is particularly true for the affordable residential segment,” said an SLBC official on condition of anonymity.
For the real estate sector, this indicates a significant tilt towards premium and luxury housing. This trend could have macroeconomic implications.
According to industry players, with the announcement of Jantri rate revision in April 2023, property prices went up and this severely impacted the demand in the residential real estate market.
