an upward cycle, and the “big star” of the sector is residential housing, Deepak Parekh from the Housing Development Finance Corporation (HDFC) noted. “I hardly need to reiterate that demand for housing in India continues to remain robust,” he told property developers at a CII real estate conference. “If one looks at the cohort of those working in sectors like IT, ecommerce, professional services, the financial sector, or those working in large companies, or the breed of new-age entrepreneurs, income levels certainly have risen…incomes are rising faster than real estate prices, and, therefore, affordability should not be affected,” he added.
According to Parekh, with home prices remaining fairly stable and interest rates reaching historically low levels, demand for housing comes from genuine homebuyers and not speculators. Despite the devastating effects of a second COVID-19 wave, the Indian residential property market managed to rebound on the back of government incentives, record-low interest rates and discounts offered by developers. “Peaks and troughs of each housing market cycle typically entail a duration of 6 to 8 years. In short, the Indian real estate market is on an upward cycle, which bodes well for us,” the HDFC chairman noted.
He added that although there have been price increases in certain high-end premium projects, however, this is not the case across the board. While small uptick in prices can be absorbed, it is critical to recognise if there is a continued increase in cost of building materials. The impact of this too can be minimised by facilitating shorter construction cycles and enabling credit input on goods and services tax for properties under construction, among other measures.
