India’s urban growth test: Can housing finance make growing cities more accessible?

As India navigates its rapid urban transformation, the focus is shifting toward how cities connect residents to jobs and essential opportunities. While infrastructure expansion and capital inflows characterize the growth of Western India, experts are increasingly questioning whether these developments are creating truly accessible, liveable environments. This central theme was explored at the News18 Rising Bharat Summit - West Edition, where industry leaders discussed the intersection of urban planning and India Canada relations in the context of global economic shifts.

Sumant Rampal, Group Head for Mortgage Business at HDFC Bank, emphasized that the housing finance sector must prioritize end users over speculative investors. A significant shift in buyer demographics has already occurred, with the average age of an Indian homebuyer dropping from 40 to between 32 and 33 years old over the last decade. Rampal suggested that the industry should aim to lower this age further to 27 or 28, allowing individuals to secure property earlier in their careers.

Expanding homeownership requires aligning housing finance with the diverse income patterns of India’s growing workforce.

Broadening the scope of housing finance

Addressing the perception that the mortgage market is dominated by high-value loans, Rampal noted that the average ticket size across the banking sector is approximately ₹40 lakh. This indicates a robust market driven by individuals seeking homes for personal use. Furthermore, there is a significant opportunity to support the self-employed segment. With nearly eight crore MSMEs in India, many entrepreneurs require financing models that differ from traditional salaried income assessments.

Panelists also highlighted that true affordability extends beyond the price of a home. Shashank Jain of Brookfield India REIT noted that the total cost of ownership includes the impact of long commutes and lost family time, arguing that infrastructure must be developed in tandem with residential hubs. Dr. Niranjan Hiranandani added that strategic planning should prioritize infrastructure before commercial or residential construction to ensure long-term viability.

Why it matters

This shift in housing finance is critical for India's evolving urban landscape. By tailoring financial products to younger buyers and the self-employed, lenders can foster more inclusive economic growth. For families and professionals, these changes mean that homeownership could become a more attainable goal earlier in life, provided that infrastructure and housing development remain integrated.