Home loan interest rates heading north, says Parekh
Published on Tue, Jul 04, 2006 at 14:18 | Source : Moneycontrol.com
Updated at Tue, Jul 04, 2006 at 15:20
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Home loan interest rates heading north, says Parekh
"Property prices have doubled in the last six months to one year and they will have to come down. Prices have already heading south and I expect this to fall by 20%."
Chairman of the country's largest housing finance company Housing Development Finance Corporation (HDFC) Deepak Parekh has said there is an upward pressure on interest rates and the rates are expected to head further north. However, he said that this would not affect the demand from the actual users, reports Financial Express.
"There is an upward pressure on interest rates. However, this is not going to affect the housing demand coming from actual users. The demand from investors or the speculators is going to be affected but that is due to fall in the prices. Property prices have doubled in the last six months to one year and they will have to come down. Prices have already heading south and I expect this to fall by 20%," he said.
He also mentioned the availability of mill land and it would also affect the property prices. On whether HDFC would hike the interest rates, Mr Parekh said that it reviews the interest rate situation on a daily basis and it would take a view depending on the cost of funds. "
"We would review the rates depending on our cost of funds. We cannot afford our spreads to be affected," he said. The housing finance major is having a spread of 2%. HDFC has hiked its home loan rate by 50 basis points in April and May.
