HDFC chairman Deepak Parekh on Thursday mentioned the demand for housing is unlikely to be impacted by rate of interest will increase within the monetary system.
“In fact, current interest rates on home loans are still below pre-pandemic levels. Further, a home loan is for a long tenor and during this period there are bound to be both, upward and downward interest rate cycles,” Parekh mentioned whereas addressing the annual common assembly of HDFC.
During the height of the pandemic, the RBI decreased the repo fee by 115 foundation factors in fast succession, moreover different liquidity measures to help the economic system, he mentioned.
“This position is now being unwound. It was unrealistic to believe that such low interest rates and high levels of surplus liquidity would sustain,” the HDFC chairman mentioned.
The RBI had raised the coverage Repo fee by 90 foundation factors to 4.90 per cent since May this 12 months to tame inflation.
While development expectations in India too have been tempered, India continues to be anticipated to be amongst the quickest rising main economies with gross home product (GDP) development estimated at above 7 per cent for the present 12 months, Parekh mentioned.
According to Parekh, the temper is considerably sombre largely due to the volatility seen within the inventory markets.
“In India, international portfolio traders have been risk-averse and promoting aggressively, largely to cowl losses made in different rising markets. Fortunately, in India, home institutional traders and elevated retail participation has helped help the fairness markets.
“It is also important to recognise that unusual measures were taken for unusual times during the pandemic and these measures are now being withdrawn in a calibrated manner,” he famous.
While inflationary expectations are more likely to stay above the RBI’s consolation zone of 6 per cent over the following 3 quarters, India’s enhance in inflation charges shouldn’t be due to extra demand. “The root of India’s current inflation is the supply side — largely driven by higher oil and commodity prices, which in turn is amplified due to geo-political tensions. Once supply chain disruptions ease, India’s inflation rate is also likely to temper downwards,” Parekh noticed.
“Now so far as dwelling loans are involved, we have now had an exceptionally good run with the robust demand for housing, coupled with rates of interest at an all-time low. The month of March 2022, HDFC had recorded its highest variety of Individual mortgage receipts at over 86,000.
“I continue to maintain that despite changes in the macro environment, the growth potential for housing in India remains immense,” Parekh mentioned.
