Calling the existing home loan rates the lowest in the last four decades, Keki Mistry, Vice-Chairman and CEO, HDFC Limited, has predicted that the lower interest rates regime will continue for another six to twelve months.
He was speaking at the Naredco’s virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020 in association with APREA.
“The home loan rates have been the lowest in the last four decades. For the next six to 12 months, the benign interest rates environment will continue. The growth in the economy and the real estate has been sharp. The factors like the RBI infusing much needed liquidity into the sector, various concessions given by the Government and the global interest rates like the stamp duty relaxations have extended the best buying opportunity for the homebuyers. The trend will continue with the lowest interest rates regime,” said Mistry.
He cautioned that the RBI may face some pressure owing to the higher inflation that will reduce its ability to cut rates further. He also observed that the banks are now distinguishing between the strong and weak developers for lending; hence improving the quality of balance sheets, avoiding over-leveraging and staying well-capitalised will help the developers float well in the market.
Citing that the festive season around Diwali this year has witnessed a major turnaround for the residential real estate segment by registering a growth of 83 per cent in the number of residential units and the growth in the sales value by 72 per cent over the last year, Anuj Puri, Chairman and Founder of ANAROCK Property Consultants, observed that the affordable housing segment will continue to grow. “The residential sales in the July to September quarter is 67 pc of the Q1 sales of Jan to March 2020, which is a clear indication that the affordable housing segment is back in action,” he added.
Neel Raheja, President, K Raheja Corp, indicated that, “The start of the pandemic saw a few months of zero sales but soon people realised the value of owning a home which saw a severe turnaround. The volume will increase in the coming months and we expect the momentum to continue.”
Vikram Garg, Managing Director, Blackstone, observed that as the global interest rates have been low, the global fund managers are bullish on the country like India. The domestic individuals have founded a great investment class, which has created large investment opportunities as a saving instrument.
Naredco and APREA, along with knowledge partner ANAROCK, had organised REIIS-2020 with the theme of ‘India – Opportunities in the Coming Year’.