HDFC expect rates to increase by 25-50 bps in the first quarter of next fiscal

According to Housing Development Finance Corporation (HDFC), country’s largest mortgage company interest rates will probably increase by 25 to 50 basis points in the first quarter of the next fiscal. This was pointed out by HDFC joint managing director Renu Karnad, who informed reporters that HDFC is also expecting increase in loan disbursements of by 22 to 25% during the current fiscal.

While speaking on the sidelines of a function marking the launch of the Real Estate Sensitive Index (Ressex), Ms Karnad stated attention is being paid over the rise in the real estates prices which have increased sharply due to the recovery in capital markets.

In her speech, Ms Karnad said, “Even in today’s ‘affordable housing’ mantra days, the common man has to shell out more than an arm and a leg to buy his home. “In India, housing, if priced correctly, has an enormous demand. Given the acute housing shortage, it is unlikely that there will be any saturation in the market for a long time to come.”

Ms Karnad added, the real estate index, will be helpful for the customers and lender as they will be to take a view of the housing market. The index has been developed by a private consultancy firm Liases Foras.

“In the last year alone, which was one of the toughest periods in economic history, the real estate industry in India has managed to grow at over 16% YoY. As a contributor to GDP growth, current estimates place the real estate sector at 8.86% of GDP. At the same time, over Rs 230 billion is being proposed to be raised across 8-10 real estate IPOs within the next 6-12 months. The post-crisis events have shown us the importance of transparency, compliance and integrity in the business world,” she said.

“The housing industry in particular, which addresses the needs of millions of consumers, requires a greater degree of sophistication in its reporting of accessible and value-adding information,” she added.