Housing demand in India: HDFC Chairman Deepak Parekh says it is here to stay
"In my 44 years working in the housing sector, I have to say that the strong demand that one has seen for housing in the recent period has certainly surprised," said Parekh
Deepak Parekh, the head of the country’s largest mortgage lender, feels that current housing demand is structural and here to stay.
“In my 44 years working in the housing sector, I have to say that the strong demand that one has seen for housing in the recent period has certainly surprised,” said Parekh.
Speaking at the One World, One Realty, a virtual Global PropTech Summit, Parekh highlighted that the demand for housing in India is coming from first-time homebuyers, customers moving up the property ladder by shifting to larger homes or acquiring a second home in another location.
“Prime Minister Awas Yojana, under which an estimated 11.3 million home loans have been sanctioned, has been a game changer for the housing sector as the ultimate objective is to build a more inclusive and a property-owning democracy…due credit must be given to the govt for its dedicated focus on the ambitious housing for all programme,” he said.
The recent Knight Frank-FICCI-NAREDCO Real Estate Sentiment survey also highlights that the ‘Current Sentiment score’ has recorded a marginal improvement, which can be attributed to the healthy momentum in the commercial and residential real estate segments during Q4 2020 and during January – February 2021.
Expert views
Shishir Baijal, CMD, Knight Frank India in the report mentions that while the sentiment of stakeholders remains cautious owing primarily to the second wave of the pandemic, resulting in economic uncertainties, the real estate sector had seen a strong bounce-back during the last few quarters, which has kept the future sentiment of stakeholders in the positive zone.
Dr. Niranjan Hiranandani, National President – NAREDCO’s comments in the report also highlighted that there will be a positive growth in the long run for Indian real estate.
On the challenges being faced by the sector, Deepak Parekh believes that technology can help bring about the much-needed transparency and accountability in the real estate sector, and also improve cost efficiencies.
He also highlighted that the construction industry is one of the least digitised sectors in the world, citing estimates that the real estate sector spends less than 1.5% of its revenue on technology.
“Capitalising on technology for the real estate sector will improve governance and one way of doing this would be to make real time data on real estate available”, he said.
Role of technology
Deepak Parekh spoke about how the progress of projects can be monitored through digital dashboards, with data driving key decisions. Funding for projects based on achieving construction milestones can be better monitored online and this can bring in much needed transparency and accountability and improve cost efficiencies also in this sector.
He also believes that ‘Proptech’ companies can play a big role in accelerating the government’s Smart City Mission.