Amid a general slowdown in construction and real estate industry and poor credit offtake, the housing finance industry remains bullish about growth hoping to disburse over 10 per cent more loans in 2008-09 as compared with the previous year.
“There won’t be contraction in numbers for the year and the industry will end the year with growth,” said Keki M Mistry, vice chairman and managing director, HDFC.
“While growth has slowed in the second half of financial year 2008-09, the industry will end with a growth of around 10 per cent as a result of the decent growth in the first half,” said Rahul Mallick, managing director and chief executive officer, ICICI Home Finance Company.
Industry players feel that the housing demand has become inelastic to interest rate cuts now, but expects demand to pick up by the latter part of 2009.
The housing finance industry grew at 25 per cent in the year 2006-07.
The growth slowed down to around 15 per cent in 2007-08 as the interest rates shot up along with the rising real estate prices.
It has worsened this year but not bad enough to result in a contraction in growth of loan disbursement.
“The affordability has to go up and also the sentiments have to improve as people do not want to buy a house in an environment where there is instability in jobs,” said a senior official from a private sector bank.