1 in 10 Indians bought a new house in 7 years, but it’s financing from banks is the least

At least one out of ten Indian households purchased or constructed a new house in the past seven years, according to National Sample Survey (NSS) Office, Ministry of Statistics and Programme Implementation (MOSPI). Of these, at least half are first time buyers, which depicts the growth in demand for residential real estate in India. The increase in the purchasing power of the younger generations, rapid urbanisation, cultural shifts towards nuclear families, the government’s focus on affordable housing for all and more are steadily increasing the demand for housing, however, there is still a large untapped opportunity for the residential real estate market in India.

According to government data, nearly 65 percent of these households are currently living in moderately sized homes, of less than 60 square meters.

Interestingly, organised channels like banks contributed the least in funding these new homes. The largest source of funding was from unidentified sources like money received from central or state governments, loans taken from life insurance corporation, postal life insurance, refundable loans or advances from public provident fund accounts, loans from money lenders, friends and relatives, etc. Additionally, one-third of these homes were funded by a household’s internal sources, while just 28 percent was sourced from banks.