Parekh warns again, realty prices set for correction

This is not the first time Parekh has voiced his discomfort at zooming real estate prices.

Though Parekh refused to comment on when HDFC will increase its interest rates in the near future, he acknowledged that there was an upward pressure on rates. ‘‘We live in an interconnected market and internationally interest rates are on an upswing. Rates in India are also increasingly coming under pressure and I believe that they will head northwards,’’ he added.

The question of increasing housing loan arises as the RBI had last month increased the reverse repo rates. Housing loan rates currently stand at around 9.5 per cent.

He said that HDFC would take steps to assure that its interest spread, which currently stands at two per cent, is not affected. It is also looking what the Reserve Bank of India’s credit policy — expected in July — has to say on interest rates.

When asked as to whether high interest rates were affecting the realty market, Parekh said that it did not have any bearing on genuine investors but speculators who are being kept away from the market. ‘‘There are few speculators coming into the market and it is not because of increasing interest rates. With realty prices peaking, most of these people realise that a correction is in order and they won’t get desired returns,’’ he said.

Parekh also stated that conversion of NTC mill lands into residential complex will also help in bringing prices down.