Beyond the tangible benefits of asset ownership, an owned home symbolizes many intangible values such as pride and the ability to build a family. Hence, the inherent value of homeownership is driving the growing demand for housing, motivating people to realise this basic aspiration.
Indians want to own a home no matter what, and inflation has proven no hindrance to this aspiration. “Will homeownership ever lose its appeal for Indians? It doesn't seem like it, at least not with the way people are looking for home loans,” said Sarvesh Bagla, CEO and founder of Tech Magnates, one of India's largest digital marketing companies.
Techmangate frequently publishes trend data across various industries and also publishes data on trends in the Indian mortgage market.
Meanwhile, a report published by data and research giant Statista stated: [the] In FY23, Indian banks have lent over INR 2.5 trillion in home loans, exceeding pre-COVID levels, reflecting more Indians investing in home purchases.”
This could be a game changer for India's mortgage industry, as the rise of NBFCs has allowed lenders across the board to ease stringent procedures, making dreams that were once unattainable a reality.
The same Statista report states that, “A range of commercial banks, NBFCs and housing finance companies have now entered the home loan market, giving prospective home buyers from across strata of society greater bargaining power and home buying opportunities.”
India's mortgage market: Driving growth from the middle class
The Indian housing market has undergone an evolutionary journey shaped by economic growth, urbanization, government intervention and not to forget the presence of a burgeoning middle class. Rising aspirations have been fuelled by rising purchasing power and rising salary packages, especially in the tech-related industries, and this is reflected in the numbers.
An article in the Economic Times stated that “about two-thirds of the growth in India's mortgage market was driven by rising transaction volumes, and the remaining third by rising average loan sizes.”
The article further states that metropolitan markets account for approximately 60% of the mortgage market.
“On the surface, these are staggering numbers,” Bagla said. We couldn't believe it when we saw the data, but the numbers were there: Big cities like Mumbai lead the way in home loan searches in India.
The volume of home loan related searches from Mumbai grew at a robust 101.81% in 2023. If we look at the overall industry trends, all the indicators are pointing in the same direction. Home loans are here to stay.”
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Top 6 Indian cities to look for a home loan in
What is the current growth rate of the mortgage industry? Exponential
Exponential. This is perhaps the only word that best describes the growth that the Indian mortgage industry has witnessed in the recent past. For instance, as of 2023, the total outstanding mortgage loans stands at over INR 25 trillion.
The major players in this industry include well-established banks such as State Bank of India, HDFC Bank and ICICI Bank.
“What's interesting to note here is that housing finance companies like HDFC Ltd. and LIC Housing Finance have also started taking up space.” Sarvesh Bagla.
When viewed side by side with online search volume, this growth story is proven again.
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- HDFC's housing finance division saw search volumes grow by over 11% in 2023.
- LIC Housing ended the year with a 25.83% increase in search volumes.
- Bank of Baroda, ranked fifth in the list of top 10 brands, saw the highest growth in searches with a 60% increase.
“These figures should not be taken lightly,” Bagla added. “Tastes are changing. There has already been a major shift in the way people in the Indian heartland look for products and services. Brands will benefit from taking an honest look at how well they cater to these changing needs.”
Homeownership Trends in India: Enduring Stories and Financing Opportunities
The quest for home ownership in India is not likely to die away anytime soon.
While the goal of home ownership may continue to change dramatically, from affordable to luxury and everything in between, the fact remains that Indians' aspirations for advancement and security are tightly linked to the land they own.
People hoping to own land are facing an overwhelming process alongside rising ambitions – creating a unique opportunity for banks and lending institutions to help their customers navigate the complexities.
The opportunity to build true, lasting relationships with customers is right there for brands that truly want it, and this opportunity can also be data-driven.
A timely and in-depth look into how Indians search for information and consume it before making decisions could be a game changer.
To get started, check out Techmagnate's Mortgage Trends Report. Leading SEO Company in IndiaThe report contains data that illuminates consumer intent and highlights opportunities for brands to leverage their online presence to get ahead of the competition.
Disclaimer: This article is a paid publication and has no journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/support the content of the article/advertisement and/or the views expressed herein. Hindustan Times is not responsible or liable in any manner whatsoever for anything contained in the article and/or any views, opinions, statements, declarations, assertions etc. expressed in the article.
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Release Date: June 6, 2024 12:30 PM IST
