Riding on good demand in non-metro cities — a development that signals the first signs perhaps of a reviving economy — the country’s largest housing sector finance company HDFC has said that it expects up to 25 per cent growth in the retail home loans portfolio this fiscal. At the same time, home loan seekers may see lower interest rates in the coming few months if the cost of borrowings for the company comes down.

Barring parts of Delhi and Mumbai, realty prices have corrected by 15-30 per cent, spurring home loan demand and raising the hopes of bankers. “Our business has picked up significantly. I will just say that May was better than April, June was better than May and the July number so far has been very very positive. We are targeting growth of 20-25 per cent in terms of home loan disbursal in fiscal 2009-10,” said HDFC chairman Deepak Parekh on the sidelines of a function organised by industry chamber Federation of Indian Chambers of Commerce and Industry (Ficci).

However, he cautioned the real estate players against any increase in housing prices, which could reverse the recent buoyancy in the market. “The real estate market has just begun correcting itself and it would be extremely unfortunate if developers were to increase home prices at this juncture,” Parekh said. Some of the top rung realty players, he hinted, have already started increasing prices in mid-income projects. “With liquidity no longer a constraint, certain developers are seeking to once again increase their margins,” he added.

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