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| HDFC's Q2 sanctions up 30% |
| BS Reporter / Mumbai Oct 08, 2009, 00:31 IST |
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In a pointer to the continued recovery in the home loan segment, the country’s largest mortgage lender, Housing Finance Development Corporation (HDFC), has seen a 30 per cent growth in loan approvals in the second quarter over the first quarter, Chairman Deepak Parekh said here today.
“We see a good growth in loan disbursals in the next few quarters. HDFC expects an overall 20-25 per cent growth in loan disbursals in 2010,” Parekh said on the sidelines of a private equity forum.
For the quarter ended June 30, 2009, the home financier had seen a 22.6 per cent year-on-year growth in sanctions, while disbursements rose 20.6 per cent against the same quarter last year.
 According to Parekh, demand for home loans in the retail sector has increased significantly, especially for small and modest houses. However, demand for commercial real estate is still subdued and is unlikely to pick up on account of surplus capacity.
In recent weeks, a number of large mortgage financiers, including HDFC, ICICI Bank and State bank of India (SBI), have slashed home loan rates to tap the growing demand. Lenders expect the ongoing festive season to further boost home loan sales.
However, Parekh expressed concern over the rate of rise in housing prices in the past few weeks, hinting at the formation of a housing bubble. “Housing prices have been rising far too quickly. I think people are now becoming over-optimistic. Some developers feel they can now sell at whatever price they want,” he said.
Commenting on the spate of initial public offers that recently hit the county’s capital markets, Parekh said many of them were overpriced. “Promoters wanting to cash out on a rising market scenario is fine, but not at the cost of leaving nothing on the table for the investors.markets are looking a bit expensive at over 18 times forward earnings now, especially in comparison with other emerging countries,” he said.
When asked whether he saw interest rates rising, Parekh said that interest rates could rise marginally in the March quarter.
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