Summary: The Indian home loan market is growing rapidly as the upcoming metros and state capitals are now witnessing a steady demand. This article throws light on this growth trend.

Forget the metros; it is the smaller cities and upcoming metros in India that are really witnessing a housing boom. Sample this: every fourth household in sleepy Gangtok took loan to purchase a home from a scheduled commercial bank in 2006-07; over one-fifth of all homes in Bhubaneshwar did the same in that period.

At an average of barely Rs 3.4 lakh per loan to purchase home, the residents of the Sikkimese capital may not be able to match the residents of the metros when it comes to the size of the loan amount. However, in terms of the sheer proportion of families that are borrowing to have a nest they can call their own, small-town India is on the march.

However, in terms of the value of home loans, Mumbai tops the list with a little under Rs 24,000 crore in 2005-06, the latest year for which detailed data is available. Delhi was the second with over Rs 16,000 crore, followed by Bangalore with over Rs 14,000 crore. Chennai witnessed a little more than Rs 10,000 crore while in Hyderabad the amount was over Rs 7,000 crore.

The metros definitely dominate this list, even without including suburban districts like Thane and Thiruvallur. How you rank the cities in terms of their propensity for home loans depends on the parameters you choose. Various aspects like the volume of loans, the value of each loan, the proportion of households that borrowed or the average borrowing per household comes into picture during this valuation.

Look at the average value of each loan account opened in 2006-07 and the list changes a lot. Noida now tops the list with Rs 10.5 lakh followed by Gurgaon with Rs 10.2 lakh and Delhi with Rs 9.8 lakh comes third. Mumbai, with an average housing loan of Rs 7 lakh, is now put at eighth place. It is a list that has the big metros and their immediate neighbors crowding the top of the list.

Look at home loan market in India in terms of the average housing loan per household and there is another list. Noida and Gurgaon remain on top in this chart with Rs 1.49 lakh and Rs 1.29 lakh respectively, but Chandigarh and Chennai, with an average of just over Rs 1 lakh, are now joint third while Delhi slips to No 17 with mere Rs 0.49 lakh.