In the last seven years, one out of every ten Indians has purchased a new home, yet bank financing remains the least common
Owning a home is a dream for many Indians, and it is considered a symbol of stability and security. However, a recent report has revealed that only one in ten Indians has been able to purchase a new house in the last seven years, and financing from banks for home purchases is at an all-time low. According to a report by the Reserve Bank of India (RBI), only 10% of Indian households have been able to buy a new house between 2014 and 2021. The report also highlighted that the percentage of households that own a house has only increased by 2% during this period.
One of the primary reasons for the low percentage of home purchases is the high cost of real estate. The skyrocketing property prices have made it difficult for many Indians to afford a new house. Additionally, the lack of affordable housing options has further aggravated the problem. The report also revealed that the financing of home purchases from banks is at an all-time low. The percentage of home purchases financed by banks has declined from 13% in 2010 to just 9% in 2021. This is due to several factors, including the reluctance of banks to lend to individuals with low credit scores and the high-interest rates charged on home loans.
The lack of financing options has also led to a rise in alternative modes of financing, such as borrowing from friends and family or taking out personal loans. However, these options often come with higher interest rates and a lack of security. The government has taken several steps to address the issue of affordable housing, including the Pradhan Mantri Awas Yojana (PMAY) and the Credit Linked Subsidy Scheme (CLSS). These schemes aim to provide affordable housing to low-income families and provide subsidies for home loans. The government has also announced several measures to boost the real estates sector, such as tax incentives for developers and the creation of a Real Estate Investment Trust (REIT) framework. These measures aim to attract more investments into the sector and increase the supply of affordable housing options.
In conclusion, the low percentage of Indians buying new homes in the last seven years is a cause for concern. The high cost of real estate and the lack of affordable housing options have made it difficult for many Indians to realize their dream of owning a home. The decline in financing from banks has further aggravated the problem. The government’s efforts to address this issue through various schemes and incentives are a step in the right direction, but more needs to be done to make homeownership a reality for more Indians.
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