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Certus Research
Certus Capital
3 Minutes
Declining traditional sources of capital for the Real Estate Sector
RBI has recently shared a report on Trend and Progress of Banking in India (2022-23). Few points caught our attention related to the deployment by Scheduled Commercial Bank (SCB) and NBFC credit in Commercial Real Estate (CRE) and housing loans:
Traditional sources of finance to CRE are not meaningfully active
If we dig deeper, NBFCs have continued to shrink their CRE lending book:
At the same time, residential estate remains robust with strong sales and launch momentum across cities in India (Refer our earlier insight on [Higher mortgage rates have been absorbed well](https://certuscapital.in/wp-content/uploads/2023/12/Higher-mortgage-rates-have-been-absorbed-well-Certus_v2.pdf)):
Credit to retail housing loan from both Banks and NBFCs remains robust
Certus view:
Clearly, SCBs aren’t too active in the CRE sector and NBFCs have significantly vacated this space. There is a massive white space in terms of capital availability for performing, unlisted players. On the other hand, residential cycle remains strong and we are in the 3rd year of a multi-year housing cycle. This unique situation has created an attractive opportunity for creation of a specialized CRE credit platform to plug this funding gap.
Note: SCB excludes the impact of the merger of HDFC Bank and HDFC Ltd
Source Name: Certus Capital, RBI
June 2026
