NEW DELHI: As three consecutive repo rate hikes by the RBI have pushed interest on home loans to pre-covid level, Rajiv Singh, Chairman of India’s largest real estate company DLF, has said rising mortgage rates could pose “near-term” challenges to demand momentum in the housing sector, but the company expects no major adverse impact.
“Rising mortgage rates do appear to pose near-term challenges to this demand momentum; however, we do not anticipate any significant material adverse effect given the latent demand in our sector as well as the inherent strength of the Indian economy,” Singh said in his address to the company’s shareholders at the
57th AGM.
The RBI has raised the repo rates by 140 basis points since May to control inflation. As a result, the interest rates on home loans have increased to about 8% from near 6.5% in the past few months. Many industry experts believe that demand for realty may take a hit due to this steep jump of 1.5%. Singh noted the residential segment has seen a structural recovery on strong demand and credible players are gaining market share. He added that the larger and credible players continued to gain market share on account of consolidation in their favour, along with improving consumer confidence.
The DLF Chairman also said the company has introduced new product offerings across multiple geographies and product markets and consequently delivered healthy growth in new sales bookings for this fiscal.
“Our super luxury offering - The Camellias - has set a new benchmark in high-quality living. While we remain focused and committed to getting the right products in our relevant markets, we are proceeding with caution by keeping a close watch on the evolving landscape,” Singh said.
DLF’s sales bookings rose to Rs 7,273 crore in 2021-22 from Rs 3,084 crore in the preceding fiscal.