Correction in real estate is bound to come: Parekh | india | Hindustan Times
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Correction in real estate is bound to come: Parekh

india Updated: Feb 17, 2009 21:04 IST
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Expecting correction in real estate prices, country's largest housing finance company HDFC Ltd on Tuesday said it would cut interest rates in case costs of fund comes down.

"Where flats are more expensive, the drop will be sharper than where the flats are cheaper... Correction is bound to come," HDFC Chairman Deepak Parekh told reporters in New Delhi.

Asked whether HDFC would cut interest rates, he said, "if the availability of money...If our cost of fund comes down, we will certainly reduce rates."

HDFC last relaxed its housing loan rates in December 2008, cutting down rates for home loans above Rs 20 lakh by 50 basis points.

The rate for loans above the said category was reduced to 11.25 per cent from 11.75 per cent earlier.

It also introduced a new slab of housing loan below Rs 20 lakh with interest rate of 10.25 per cent.

Following the easing of benchmark rates, the Equated Monthly Installment (EMI) for the existing and new borrowers would come down.

On the policy rate cut, Parekh said, since inflation numbers are down RBI may take some measures after few weeks.

"RBI would take some steps, may not be immediately but may be after a few weeks," he said.