Home truths: Number of loan accounts shrink, borrowing sizes swell as houses slip out of reach in Gujarat

Ahmedabad: Buying a home in Gujarat is becoming costlier even as fewer people are taking home loans. Fresh banking data suggests soaring property prices are forcing buyers to either borrow larger amounts or postpone home ownership altogether.

The number of home loan accounts in Gujarat fell 9.5% to 4.03 lakh in FY26 from 4.46 lakh in FY25, according to State Level Bankers’ Committee data. However, the value of home loans disbursed rose 9.6% to Rs 63,997 crore from Rs 58,399 crore.Bankers said this divergence points to rising residential property prices rather than stronger housing demand.“A new three-bedroom hall-kitchen apartment priced above Rs 1 crore has become common in cities such as Ahmedabad, Gandhinagar and Vadodara, regardless of whether buyer demand supports those prices.

The shortage of affordable housing has widened the gap between incomes and home prices. Salaries, particularly of professionals who make up a large share of borrowers, have not kept pace. Buyers are therefore borrowing more or delaying purchases,” a banker said, requesting anonymity.The trend is visible across Gujarat but is most pronounced in urban centres such as Ahmedabad, Gandhinagar and Vadodara.“In western Ahmedabad, home prices have climbed steadily over the past few years, while several new three-bedroom projects in eastern Ahmedabad are now being launched in the Rs 1 crore to Rs 2 crore range.

In Gandhinagar, projects around Pandit Deendayal Energy University, Raysan, and GIFT City are largely premium developments, with three-bedroom apartments starting at about Rs 1 crore,” the banker added.Developers attributed the price rise to sustained increases in land, construction material and labour costs, while maintaining that their profit margins have narrowed.Viral Shah, secretary of Credai Gujarat, said: “The withdrawal of tax incentive under Section 80-IB of the Income Tax Act, which allowed a 100% deduction on profits from eligible affordable housing projects, for new affordable housing projects from 2022 had also slowed launches in the segment.”Developers are also seeking a revision in the definition of affordable housing. Under norms notified in 2018, homes measuring up to 90 sq m and costing up to Rs 45 lakh qualify as affordable. “Market prices have changed dramatically since then. The price ceiling needs to be revised,” a Credai Gujarat office-bearer said.Banking sector sources said the shrinking supply of affordable homes has reduced the number of financed housing units, while pushing up average loan sizes as developers increasingly launch premium projects.