Ahmedabad: Gujarat’s housing market is seeing fewer buyers take home loans, but those who remain are borrowing substantially more. Housing loan demand is shifting towards fewer, higher-value borrowers, with the average loan size surging 72% in a year to Rs 18.8 lakh in the June quarter compared to same period last year.The latest report by the State Level Bankers’ Committee (SLBC) show that fresh housing loan accounts fell 28% to 93,716. Yet home loan disbursals rose 24% to Rs 17,600 crore.According to banking sector sources and real estate experts, the shift not only reflects rising property prices but also shows how small-ticket buyers were finding it harder to enter the housing market as property and construction costs rise.Gujarat’s housing market is thus splitting into two segments. While the affluent buyers continue to buy larger homes, the mass market was struggling with affordability.
Home Loan
“Land and construction costs have gone up substantially across Gujarat. This has pushed up residential real estate prices significantly, making homes difficult for buyers whose incomes have not risen at the same pace,” said Viral Shah, secretary, CREDAI Gujarat.“Only buyers with higher purchasing power remain active, and they continue to borrow substantially more. High-income professionals in the finance sector, business owners and high networth individuals continue to have the capacity to take larger loans,” he added.“The demand is good within Ahmedabad, particularly in established areas. In places such as Naranpura, Ranip, Navrangpura and Paldi, redevelopment is generating pace because people prefer to stay in these established neighbourhoods,” Shah said.The picture is different on the outskirts, where affordability has traditionally been a key selling point. “Demand for homes on the outskirts is weaker. The gap between what buyers can afford and what it costs to build a new home has widened,” he added.A banking sector source said, “In areas along the peripheries of Ahmedabad city such as Shela, South Bopal, Godhavi, Shilaj, Gota, Ognaj, Odhav, Tragad and Nikol, among others, the price of an average three-bedroom apartment is around Rs 1 crore.”This was a huge expenditure, and not all salaried professionals can afford to buy a house at this cost, he said requesting anonymity.For developers, this could make the middle of the market the pressure point. Premium housing continues to find buyers who can absorb higher prices. Projects that depend on a large base of price-sensitive buyers, however, face a tougher market.
