Keki Mistry, vice chairman and CEO at HDFC, said at a webinar on Thursday that the benign interest rate regime will continue for the next six to 12 months.
“Interest rates are at the lowest in the last four decades. Property prices have gone up in the last many years,” Mistry said at a webinar organised by Naredco and APREA today.
Mistry said markets at present are distinguishing between strong property developers and weaker developers unlike in the past.
“In 2017 or 2018, the gap between lending rates given to AAA developers and AA developers was limited. But today it depends on the credit profile of developers,” he said.
He said some developers had earned a bad name due to analyst reports, media reports on oversupply and so on.
“Weaker developers will find it difficult to raise funds unless they reduce leverage,” he said, adding that more the leverage, the more the pain for developers.
He said restructuring may not help all developers as they may not meet conditions attached to restructuring .
“Non performing assets in real estate will inch up in the next one or two quarters before they stabilise in the next three to four quarters,” he said.
Mistry said the demand for residential properties had picked up. “People are beginning to believe that it is the best time to buy. Interst rates are at an all time low. Prices have not gone up,” he said.
He further said that the Maharashtra government’s move to cut stamp duty helped residential sales in the state. “More such measures by other states will help real estate sales,” he said.