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• State Bank of India has urged the central government to revisit the definition of affordable housing amid rising residential property prices and higher home loan ticket sizes.
• C S Setty stated that the bank’s average home loan size has increased to around INR 51 lakh from INR 35–40 lakh over the past two years, reflecting changing market dynamics across urban housing markets.
• The current affordable housing framework largely applies to homes priced up to INR 45 lakh, subject to specified carpet area limits under existing policy norms.
• The lender stated that current thresholds may no longer reflect residential pricing levels in major cities, renewing discussions around affordable housing incentives, housing finance accessibility and policy recalibration in India’s residential sector.
State Bank of India has called for a review of India’s affordable housing definition amid rising residential property prices and increasing home loan ticket sizes across key urban markets. Advertisement
Speaking during the bank’s post-results interaction earlier this week, SBI Chairman C S Setty stated that the current affordable housing framework requires reassessment to better reflect prevailing market conditions and housing costs.
According to Setty, the bank’s average home loan size has increased to approximately INR 51 lakh compared to around INR 35–40 lakh two years ago, indicating the extent of price escalation in the residential sector.
He noted that rising housing prices have made the existing affordable housing thresholds less representative of actual market realities, particularly in metropolitan and tier-I cities where residential values have appreciated significantly over recent years.
At present, homes priced up to INR 45 lakh and meeting specified carpet area norms qualify under the affordable housing category. Such classification enables policy incentives including priority sector lending benefits for banks and certain tax-related advantages for homebuyers and lenders.
Setty stated that SBI has been communicating its recommendations regarding revision of the affordable housing definition to the Government of India. He indicated that the review should include both investment thresholds and carpet area criteria.
Industry participants have increasingly highlighted the widening gap between official affordable housing thresholds and actual urban housing prices, particularly across major residential markets such as the National Capital Region, Mumbai Metropolitan Region, Bengaluru, Hyderabad and Pune.
Housing sector stakeholders have argued that sustained increases in land values, construction costs, input prices and financing expenses have altered affordability metrics across urban India.
According to SBI’s FY26 disclosures, the bank’s domestic home loan portfolio recorded growth of more than 13 per cent during the financial year, crossing INR 8.6 lakh crore while maintaining its leadership position within the housing finance segment.
The discussion around affordable housing thresholds has also gained significance as policymakers continue to evaluate housing demand, urbanisation patterns and the role of residential real estate in economic growth and infrastructure development.
Banking and real estate sector participants believe that any revision to affordable housing definitions could influence lending eligibility, policy incentives, taxation benefits and project positioning across India’s residential market.
Source - PTI
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