Indian real estate market is on an upward cycle: Parekh

‘Genuine buyers driving demand; sector has self-corrected’

HDFC Ltd. chairman Deepak Parekh said while property prices in some Western countries escalated during the pandemic, it mostly remained stable in India.

He added that any minor increase in interest rates in the near future would have no impact on the demand for home loans.

“In several Western countries, one could see housing prices going up during the pandemic,” he said.

“Part of this problem is that new supply has not kept pace and a large number of housing transactions were purely investment or speculative driven, which led to spiralling of prices, leaving out those who genuinely need homes to live in,” Mr. Parekh said speaking virtually at the CII Real Estate Confluence.

“China, on the other hand continues to battle with issues of over supply and over leveraged developers even though the regulators have now started easing restrictions to encourage banks to lend more to developers and speed up mortgage approvals,” he said.

In comparison, in India, the demand for housing has come from genuine homebuyers, not speculators, Mr. Parekh said.

“Home prices have stayed fairly stable, low interest rates have helped, and the real estate sector has already self-corrected and recovered from its previous down-cycle,” HDFC’s chairman said.