Real Estate Boom: Housing Finance Soars Post-COVID

Housing finance has significantly expanded, with individual home loans quadrupling to Rs 37 lakh crore by 2025. This growth signifies a deeper financialisation of housing demand. Government policy reforms, alongside initiatives like Smart Cities, have bolstered the real estate sector amid post-COVID improvements in housing sales.

Housing finance in India has witnessed remarkable growth, almost quadrupling to Rs 37 lakh crore by the end of March 2025, according to the Economic Survey 2025-26. This expansion indicates an increase in housing loans from 8% to over 11% of GDP, highlighting deeper financialisation in the housing sector.

The report notes that real estate has become a vital component of services-led growth, contributing approximately 7% to the annual GVA over the past decade. This uptick is attributed to several government policies and reforms, including the implementation of RERA, GST, and the Housing for All mission, all of which have formalized the real estate market.

Post-COVID, housing sales and home loan demands have surged significantly, driven by an array of government initiatives and improved financial conditions. Urban development schemes, such as the Smart Cities Mission, have further amplified housing demand, especially in Tier 2 and Tier 3 cities, leading to a prolonged upcycle beginning September 2021.