Gujarat Real Estate Market Witnesses 42% Drop in Home Loan Accounts

Gujarat’s residential real estate market is showing signs of a slowdown, with a sharp 42% year-on-year drop in home loan accounts in the December quarter, even as total disbursals rose modestly. This trend highlights the evolving dynamics of the housing sector in the state.

The latest State Level Bankers’ Committee (SLBC), Gujarat report reveals that home loan accounts fell 42% year-on-year in the December quarter, declining from 1.75 lakh to 1.01 lakh. In contrast, fresh home loan disbursals rose 5%, from Rs 15,211 crore to Rs 16,028 crore during the same period. This suggests that while fewer people are taking out home loans, those who are borrowing are doing so for larger amounts.

The data indicate fewer borrowers but higher ticket-size loans, suggesting that demand is concentrated in premium housing rather than broad-based buying. Private banks have pared their housing exposure, while public sector banks expanded lending selectively. This shift in lending patterns reflects a cautious approach in the current economic climate.

Supply trends also reflect moderation. Data from the Gujarat Real Estate Regulatory Authority (GujRERA) show that new project registrations declined from 1,859 in 2022–23 to 1,715 in 2023–24, before recovering slightly to 1,822 in 2024–25. So far this fiscal, 1,418 projects have been registered. This trend indicates a more measured approach by developers in launching new projects, possibly in response to the slowing demand.

Industry stakeholders say affordable and mid-income housing are witnessing weak demand, while premium homes continue to see traction. High property prices and cautious buyer sentiment have weighed on volumes, with developers adopting a wait-and-watch approach to fresh launches. This cautious stance is likely to continue until there is a clearer indication of market recovery and increased buyer confidence.

In summary, the Gujarat real estate market is experiencing a slowdown, particularly in the lower and mid-income segments. While premium housing continues to attract buyers, the overall market remains cautious, with fewer new projects and a shift towards larger, more expensive loans. Developers and lenders are carefully navigating this challenging landscape, waiting for signs of a more robust market recovery.