Home loan borrowers drop 35% in FY25, but average mortgage size grows in Gujarat
AHMEDABAD
:
Gujarat
's
housing finance
market is presenting a paradox — the total money lent is rising, but the number of borrowers is shrinking. In FY 2025, the total housing finance disbursed in the state rose 8.9% to Rs 58,399 crore, up from Rs 53,590 crore in FY 2024. However, the number of loan accounts dropped sharply by over 35%, from 6.9 lakh to just 4.46 lakh, according to data from the
State Level Bankers' Committee
(SLBC) – Gujarat.
The numbers point to a shifting trend: fewer people are buying homes, but those who are, are borrowing more. The average loan ticket size is increasing — reflecting either costlier homes or borrowers stretching their finances further.
"The demand for new homes has clearly dipped, especially in the affordable and mid-income segments over the past six months," said a senior official with SLBC-Gujarat. "The HDFC-HDFC Bank merger had temporarily inflated the number of accounts and disbursals in the previous fiscal. What we're seeing now is a high-base effect and a genuine slowdown in entry-level housing demand."
Developers in Ahmedabad confirm the trend. While luxury housing continues to see traction — particularly from NRIs and high-net-worth individuals seeking stable investment avenues — mid-tier and affordable housing projects are witnessing a slowdown in footfalls.
This pattern is echoed across Gujarat. Housing finance companies are disbursing larger loans, but to fewer customers — a sign of consolidation in demand and possibly a growing mismatch between supply and affordability.
"Post-Covid, demand for homes had soared as people looked to upgrade or move away from renting. But over the past three years, land and construction costs have pushed home prices up significantly. Incomes haven't kept pace — so the market is cooling. Currently, there is a liquidity crisis in the market. Affordable segment is struggling even as the premium homes segment is faring comparatively better," said Viral Shah, vice president, CREDAI Ahmedabad.
Kamal Vataliya, vice-president of the Ahmedabad Realtors' Association, adds that surging equity markets have also altered investment behaviour. "Over the past three years, stock markets have reached record highs. Many traditional real estate investors diverted their funds into equities instead of using them as down payments for homes. This too delayed purchase decisions."
While the average
home loan
ticket size has increased by 66% over the past five years, experts caution against interpreting it as a sign of growing prosperity.
"It's not always that people are buying bigger or better homes. Often, they're simply paying more for the same product. Higher property prices are forcing borrowers to stretch their finances," a banking industry source pointed out.
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