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Wednesday, January 19, 2022

"Increasing housing loan rates does not affect customers much, demand will remain in real estate even further"- Keki Mistry, HDFC

CNBC-Awaaz completes 17 years today. Your favorite channel is celebrating the 17th birthday today, which has been the architect of the RETAIL EQUITY revolution in the country since then. On the occasion of Awaaz’s 17th birthday, Keki Mistry, Vice Chairman and CEO of HDFC had a special conversation with the channel. In this conversation, Mistry told his perspective on the realty sector. What will be the demand for housing ahead, what changes have been seen in the realty sector from Corona. Apart from this, Keki Mistry also gave his opinion on the rates of interest.

After many years, in the year 2021, strong momentum has been seen in housing. How much structural and pent up can be seen in this and can this momentum continue into 2022 as well?

Responding to this, Keki Mistry said that the demand for housing in 2017-20 has come from tier 2-3 cities. There has been a demand for houses from the outskirts of Mumbai. People’s income has increased in the last 3-4 years. However, there has been no change in prices in real estate. If seen, the prices of houses in 2021 were the same then they were in 2017. I believe that due to over supply also the property prices remained low.

Yet the demand in real estate has increased in 2021. The demand for homes has also increased due to lower interest rates. Corona has also played a role in increasing the demand for real estate. Due to the lockdown and the new culture of work from home, people felt the need for bigger houses during the Corona period. Therefore, the demand is expected to remain strong in the coming times as well.

The first such good momentum pick-up happened between 2003-2008, the golden period of real estate investments. So is there any similarity between this moment of time and now?

Keki Mistry said that it should be kept in mind that the demand in real estate keeps on increasing and decreasing. It is seen that there is no demand in the sector for 2-3 years, but it also happens when the demand will pick up in the next 3-4 years. So we saw that the 2003-08 period was also a bullish phase. But it is also seen that the demand has always remained in Tier-2, Tier-3 cities. Whereas

There was a decrease in demand in the big cities.

There is concern about the rate hike in 2022 this year. What is your opinion on this, what will be the rates this year and can this bring back demand or have some effect on it?

He further said that the housing loan rates in the country are very low. According to statistics, till now the loan rates have never been less than 7%. Therefore, the interest rates are not expected to change much. At the same time, the increase in rates will not affect the demand because the customer gets various tax exemptions on the home loan, so the increase in rates does not have much effect on the customer.

Can this third wave of COVID slow down credit offtake, can we see defaults rising? Or is it too early to comment on this?

Keki Mistry said that the third wave of Corona may have less impact on the economy. This time too there will be no effect of corona on demand. Even the possibility of lockdown in the country this time is also less. Therefore, if the lockdown is not imposed, then the income of the people will remain.


Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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