NEW DELHI: Home sales in top Indian cities as well as smaller towns such as Jaipur and Vadodara have picked up over the last few months as confidence to spend returns among consumers, said Renu Sud Karnad, managing director of India’s biggest mortgage lender, HDFC.
“This time, it’s not just the big builders who are selling. The big builders had large projects and most of them were high-end. What you are now seeing is what I would call the AA or A category builders and not the AAA builders who are selling.
Sales of the bigger players are still modest, but it’s the middle income builder making a home in say, Mumbai, in Thane, in the outskirts, and is selling it between Rs 50 lakh and Rs 2 crore, who is able to sell,” she said.
“I feel these kind of sales are here to stay. It isn’t just a random spark, because in the last few months we are also seeing the auto segment do well. The confidence of spending is definitely coming back,” said Sud Karnad. To tap into this rising demand, HDFC’s wholly owned home search and discovery portal HDFC RED has launched a new platform including a new app.
HDFC, Karnad said, has invested more than $3 million in the last few years on developing and growing the portal and is now getting ready to move towards online transactions where home buyers can shortlist and book homes on the site as demand grows.
What is also helping push demand, she said, are lowering of interest rates. At 9.4%, home loan interest rates are the lowest in last two years. Karnad said incomes of individuals too have moved up.
“The 7thPay Commission will also have an impact going forward as most people, when they get bulk money, think of real estate. There will be a pick-up in smaller cities as well because of this,” she said.
A Knight Frank report said the top eight cities saw the lowest number of launches of new housing projects in the last three years in first half year to June 2016. This has put the brakes on the rising unsold inventory.
Credits ET Realty