The recent budget announcements have provided a significant boost to the sector, according to the NHB report, particularly through the expansion of PMAY 2.0, which is set to enhance the availability of affordable housing for India’s growing urban population. As the government continues to prioritise affordable housing, the scheme’s allocation is expected to further stimulate demand, particularly in Tier-II and Tier-III cities.
Urbanisation driving housing growth
Urbanisation remains a key factor in the sector’s growth, the NHB report showed. As India’s population continues to migrate to urban areas, the demand for housing in metropolitan regions and peripheral areas has surged. Transit-oriented development (TOD), which focuses on integrating housing with public transport networks, is becoming an increasingly popular model for cities looking to manage their growing populations while enhancing liveability and connectivity. This has led to increased development activity in cities with strong public transport infrastructure, further propelling the demand for residential properties.
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Digitisation is also playing a crucial role in reshaping the housing market. The growing use of digital platforms for property transactions, enabled by advancements in artificial intelligence (AI) and blockchain, is improving transparency and reducing the time and costs associated with property deals. The integration of these technologies has allowed for more efficient market operations and is expected to boost consumer confidence in property transactions.
The role of HFIs
Moreover, the role of Housing Finance Institutions (HFIs) remains pivotal in enabling access to home loans for a wide range of income groups, according to NHB. With housing finance companies reporting steady increases in loan disbursements, the availability of financing remains one of the primary drivers of demand in the sector. As of September 2024, the total outstanding housing loans stood at ₹6.25 lakh crore, reflecting the growing accessibility of home financing across the country.
Looking ahead, the housing sector is also expected to benefit from increased investments in urban infrastructure. The development of smart cities, better public transport, and improved connectivity are likely to further stimulate real estate growth, particularly in emerging urban centres. The government’s focus on energy-efficient and sustainable housing solutions will also contribute to the sector’s long-term growth, aligning with global trends towards greener, more sustainable living environments.
