According to a report, housing demand is “very robust” at historic low-interest rates.

By Admin |
Feb 25, 2022 |
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According to a report, housing demand is “very robust” at historic low-interest rates.

Deepak Parekh, the chairman of HDFC, said recently that interest rates in India were at their lowest point in years and that demand for homes in the country remained “very solid”. He said that a rise in interest rates would be “calibrated and non-disruptive.

Parekh told delegates at the CII Real Estate conference that despite inflation now being at the upper end of its goal range, “the RBI has underlined that growth would remain a priority” and that “at this stage, the RBI envisages some softening of prices moving forward.”

“Also, keep in mind that a mortgage loan is a long-term obligation. Interest rates may rise and fall throughout this time period. Because borrowing rates have risen marginally, “a consumer who wants a property will not hold back.”

According to him, the most significant sign of confidence in the “very robust” housing market has been the “strong pipeline of new releases, exceeding pre-pandemic levels.’ First-time homebuyers, as well as those moving up the property ladder, are driving the demand for housing,” according to a report from the National Association of Realtors.

Real estate prices in India are rising: Parekh.

“During the pandemic, one could witness home prices rising in various Western countries,” he remarked.

Mr Parekh added that part of the problem is that the new supply has not kept pace. A vast percentage of housing transactions were simply an investment or speculative driven, which resulted in spiralling prices that left out individuals who actually needed homes to live in.” CII Real Estate Confluence.

Although regulators have begun loosening limits to encourage banks to lend more to developers, he added, “China is still struggling with concerns of oversupply and over-leveraged developers,” he said.

When it comes to the housing market in India, Mr Parekh noted that demand has come from genuine buyers, not investors.

According to HDFC’s chairman, “Home prices are stable, interest rates are low, and the real estate market has already self-corrected and rebounded from its last down-cycle.”

This is good news for us because the Indian real estate market is on an upswing, he continued.

“Excellent” demand for homes in India, Mr Parekh said, adding that the most vital sign of confidence has been the strong pipeline of new launches, exceeding pre-pandemic levels. He noted that first-time homebuyers and those moving up the property ladder – often into larger homes or residences in different places — continue to drive housing demand. He predicted that future increases in the cost of housing would not affect the affordability of housing. “As incomes rise in India, more young people will be able to afford a home. Affordability should not be affected because salaries are increasing quicker than housing costs, he stated. Aside from a few major metro areas, prices in the cheap housing segment have remained steady, even though several high-end premium developments have already seen price increases of 15-20 per cent. Because of this, even slight price rises can be absorbed across the country. He said that the surge in the cost of building materials is something to keep an eye on. “This might be passed on to the homeowner,” he said.



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