Home loan disbursements in India to reach Rs 150 lakh crore by 2035: Report

Mumbai, Dec 18 India is undergoing a historic housing finance upcycle, with cumulative home loan disbursements projected to touch Rs 150 trillion (Rs 150 lakh crore) over the next decade, a new report showed on Thursday.

A powerful convergence of demographics, urbanisation, infrastructure investment, and policy support is laying the foundation for one of the most enduring structural credit opportunities in India’s financial services landscape, according to the report by Omniscience Capital.

With mortgage penetration at just 11 per cent of GDP, far below global benchmarks, India’s housing finance market remains deeply under-penetrated.

As incomes rise and urban aspirations expand, the sector is entering a inflection point offering substantial headroom for sustained, multi-year growth backed by strong structural catalysts, said the report.

This infrastructure-led expansion is dramatically widening the addressable housing market, pushing demand well beyond the traditional metros, the report highlighted.

Further, government initiatives are strengthening affordability and aiding supply creation with PMAY-2.0 aimed to support financing for 30 million additional homes, SWAMIH-2 targeting completion of 100,000 stalled mid-income housing units, and the Rs 1 lakh crore Urban Challenge Fund is designed to reshape Indian cities into future growth hubs.

“Continued enforcement of RERA has also enhanced transparency and buyer confidence across the real estate ecosystem,” the report noted.

The report estimates a cumulative disbursement opportunity of Rs 150 trillion by 2035 even under conservative assumptions of 40 million urban mortgages demand and an average mortgage loan value of Rs 38 lakh.

With resilient balance sheets, rising affordability, and multi-year demand visibility, the housing finance industry is poised to become a cornerstone of India’s next phase of economic growth, said the report.

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