BFSI Summit: Home loans remain top financing choice for urban Indians

As per a Knight Frank-Business Standard report, 52 per cent of surveyed urban Indian homebuyers prefer apartments

Home loans have emerged as the most preferred mode of financing while buying a house across all income groups, according to the Knight Frank-Business Standard report.

 

A survey of 1,629 urban Indian home buyers revealed that 79 per cent of the respondents chose the housing loan option.

 

Considering the home buyers’ expectations from banks and financial institutions during the home buying process, competitive interest rates, flexible loan tenures, and quick loan approval processes were found to be among their top priorities.

 

Shishir Baijal, chairman and managing director of Knight Frank India, said, “Our latest survey highlights this continued preference for homeownership, with 80 per cent of respondents aspiring to own homes and a growing trend toward premium properties, particularly in urban areas."

 

Moreover, Baijal is anticipating “a resilient real estate landscape that aligns with India’s broader development goals as the banking, financial services, and insurance (BFSI) sector facilitates this growth— offering home loans, investment avenues, and risk management tools— combined with emerging technologies and infrastructure advancements.”

 

Further, according to the report, for property purchase, location stood out as a priority and is the determining factor for 50 per cent of respondents. Meanwhile, property size and layout, affordability, builder's reputation, proximity to workplace, amenities, financing options, and future resale value turned out to be the other crucial factors.

 

The reasons for purchasing a home show distinct generational differences. “Millennials (39 per cent) and Gen Z (36 per cent) are leading the trend of upgrading and purchasing for end-use, while Baby Boomers display a stronger interest in investments (29 per cent) and retirement plans (15 per cent),” the report stated.

 

Overall, 80 per cent of respondents expressed a preference for owning a home, while only 19 per cent opted for renting, with one per cent remaining uncertain.

 

The report stated that 52 per cent of the respondents prefer apartments, followed by studio apartments at 19 per cent, and independent houses or villas at 17 per cent.

 

“Notably, gated communities and plots of land are less popular, chosen by only 7 per cent and 5 per cent of respondents, respectively,” it stated.