India's residential real estate sector witnessed a robust uptick in home loan disbursals during Financial Year 2024–25 (FY25), according to a detailed study published by Urban Money, a fintech platform under Square Yards. The report highlighted double-digit growth in both volume and value of home loans, affirming sustained consumer appetite for homeownership, especially in urban centers.

Strong Momentum in Lending

As per the report, home loan disbursal volume increased by 10%, while the value of disbursed loans surged by 15% during FY25. This notable jump underscores a resilient real estate demand, largely driven by urban aspirations, premium housing uptake, and favorable financing conditions.

Loans exceeding ₹1 crore (US$ 116,822) accounted for 21% of the total loan disbursals, reflecting a clear shift towards high-value property purchases. Urban Money’s analysis also shows that property-linked lending products, including home loans and loans against property (LAP), contributed a significant 63% of total loan disbursals, making it the largest product segment in the Indian retail lending landscape.

This financial trend runs parallel to a staggering 77% increase in residential property registrations in major Indian cities. Registrations rose from 3.07 lakh units in FY19 to 5.44 lakh in FY25, clearly reinforcing the correlation between rising homeownership and financial borrowing.

Premium Housing Gains Ground

The average home loan ticket size in India’s top cities stood at ₹74 lakh (US$ 86,415) during FY25. The cities covered include Mumbai, Pune, Bengaluru, Hyderabad, Gurugram, Noida, Greater Noida, Thane, and Navi Mumbai. This marks a 5% year-on-year increase, indicating a steady rise in property values and borrower capacities.

• In Mumbai, the average home loan touched ₹99 lakh (US$ 115,609), the highest among all Indian metros.

• In Gurugram, the average loan stood at ₹88 lakh (US$ 102,763).

In contrast, 47% of loans disbursed were in the below ₹45 lakh (US$ 52,549) category, indicating that affordable housing still retains a stronghold in tier-II and suburban markets. Another 32% of disbursals fell in the ₹45 lakh–₹1 crore bracket.

This distribution underlines a bifurcated trend: while high-end properties in metros are on the rise, affordability remains a key driver in emerging real estate corridors.

Women Buyers: A Rising Force

A particularly notable aspect of the Urban Money report is the increasing participation of women in the home loan ecosystem. One out of every five home loans—20% of all disbursals—was issued to women in FY25.

• The volume of loans disbursed to women grew 9%, while the value of those loans increased by 23%, outpacing the 14% value growth seen in male borrowers.

This signals a societal shift, with more women asserting financial independence and taking active roles in long-term financial decisions, particularly real estate.

Real Estate Pricing and Loan Trends

The Urban Money report attributes the increasing loan sizes to a consistent rise in property prices, which have grown by approximately 55–60% since FY19. This inflation in property costs has had a direct impact on average loan values, prompting banks and NBFCs to offer more flexible, larger loan options to match borrower expectations.

At the same time, EMI affordability, income growth in urban centers, and continued migration towards metro cities are reinforcing this upward trend. The report suggests that homeownership continues to be viewed as both a lifestyle and investment aspiration across India’s economically active population.

Property-Linked Loans Dominate Lending

The dominance of property-linked financial products was another key takeaway. The report identified these products—comprising home loans and loans against property—as making up 63% of the total disbursals in the lending industry during FY25. This not only highlights consumer focus on real estate investment but also underlines lender confidence in real estate assets as viable collateral.

These trends are particularly strong in cities with infrastructure development, IT sector expansion, and job creation, such as:

• Hyderabad and Bengaluru: Tech-centric hubs with strong demand for mid- to high-value homes.

• Pune and Noida: Attractive due to expanding commercial and industrial corridors.

• Thane and Navi Mumbai: Gaining traction as suburban hubs offering value-for-money properties.

Broader Economic and Policy Drivers

Several macroeconomic and regulatory factors have supported this growth in home loan activity:

• Repo rate stability from the Reserve Bank of India, encouraging relatively lower interest rates.

• Continued urbanization and government-backed housing policies, including PMAY (Pradhan Mantri Awas Yojana), driving new buyers into the housing market.

• Tax benefits on home loans under Section 80C and Section 24(B), improving loan viability for salaried individuals.

Together, these drivers have made real estate a cornerstone of wealth creation for Indian households, pushing both the demand and supply side to evolve rapidly.

Urban Aspirations Redefined

The data from FY25 paints a compelling picture of changing urban consumer aspirations:

• High-value homes are no longer niche; they are fast becoming mainstream in top-tier metros.

• Loan preferences are maturing, with buyers opting for larger ticket sizes and longer tenures to suit upgraded lifestyle aspirations.

• Women are rising as an influential borrower segment, challenging gender norms in real estate ownership.

Additionally, the digitalization of loan processing and emergence of platforms like Urban Money have reduced the complexity of borrowing, enabling better transparency, product discovery, and personalized offers, further contributing to this growth.

Future Outlook: Momentum to Continue

Given the strong underlying demand, urban job growth, and structural support from financial institutions, the home loan segment in India is poised for continued expansion in FY26 and beyond.

Analysts predict:

• Further growth in premium segment lending, especially in cities like Mumbai, Delhi NCR, and Bengaluru.

• Tier-II cities to emerge as hotspots, particularly as infrastructure projects reach completion.

• Fintech lending platforms to become dominant channels for customer acquisition and onboarding, especially among younger borrowers.

Conclusion

The FY25 home loan disbursal data, as presented in Urban Money’s report, encapsulates a dynamic and evolving housing finance market. With 15% growth in disbursal value, 21% share of high-value loans, and 20% of disbursals going to women, India’s residential finance sector is not just expanding—it is transforming.

As urbanization accelerates and aspirations continue to climb, home loan providers, policymakers, and urban planners will need to adapt to this new normal of premium housing, digital-first borrowing, and inclusive financial participation.

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