When Property Rates Rose At Fastest Pace In 30 Years, Explains HDFC Chief

The demand for housing - which has been hit by demonetisation - will come back, said HDFC vice chairman and CEO Keki Mistry. He cited the example of the demand for housing which suffered in the wake of the Lehman crisis in India to back his optimism.

"Take 2008-09 as example. In 2008-09, post-Lehman crisis and some amount of job losses in India, growth slowed down. But when it came back it came back with such a renewed vigour that if you look at the period from July 2009 to March 2010 - a 9-month period - to my mind in all my 30 years of work experience property prices in India had ever increased at the pace they increased during the 9-month period," said Mr Mistry, chief of the largest housing finance company in India.

"Not only was the due demand generated but also all the people who had held back on their purchases in the past came back and bought houses," he said, explaining why housing prices surged during the period.

Mr Mistry said India has a fundamental need for real estate, especially housing. And structurally, the demand for housing in India will always be strong.

Citing HDFC customer data, Mr Mistry said the average age of a first-time home buyer in India is about 37-38 years. "With two-thirds of the population below 35 years, all these people in the future will need housing," he said.

Economic outlook after demonetisation

My Mistry said the hit to the economy from demonetisation will be short term. "As the currency situation starts improving, everything will start limping back into normal and then start growing at a faster pace than it was growing prior to demonetisation," he said.

The outlook for the economy for the year starting April 1, 2016 looks very bright, he added.

Budget expectations

Mr Mistry said he expects the government in 2017 to give a big boost to the housing and agriculture sector.

Housing and agriculture are big employment generators, he added.