While there has been a slowdown in the  credit growth to commercial real estate , the rise in housing credit by the banks, has brightened the prospects of residential real estate .

 The Reserve Bank of India report says that retail credit, including housing , has shown an accelerated growth rate of 12.1 percent in September 2021, against 8.4 percent growth rate during the same month last year. This year, housing loans have been the drivers in credit activity as the excess liquidity has been prompting banks to lend at lower rates. Infact, the end-user lending rates plunged the most in five years, on the back of RBI’s efforts to speed up economic revival through availability of higher credit. Particularly, affordable housing finance has seen an uptick in tier 2 and tier 3 cities. The surge in housing credit has raised the share of mortgage lending to 11 percent of GDP .

Says Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, Assocham National Council on Real Estate , Housing & Urban Development, ”   The surge in housing credit growth has been largely due to an all time low sub 7 percent  interest rates, though affordable property prices have also been a significant contributor. In view of surplus liquidity of banks , RBI’s continuous accommodative stance as part of its policy to boost economy through push to credit, will further boost the growth of residential real estate in the new year.