Home Loan Rates to Remain Low- HDFC MD

December 18, 2009: The interest rate scene in the country will remain easy for the next three-four quarters as there is excessive liquidity in the financial system, said Keki Mistry, managing director, HDFC Ltd. "Credit offtake from the corporate sector is low and, therefore, demand for money will be low, keeping the interest rates too at low levels," Mistry told media persons on Thursday.

No major capacity expansion is being planned by anyone, and this will keep credit demand low, Mistry said. "Significant capacities were created in the 2005-07 period. Unless these capacities get fully utilised, the corporates are not going to need further credit." "There is an excess liquidity of Rs 250,000 crore in the country, which is getting invested in low-yielding money market instruments. This scenario is expected to continue for at least three to four quarters," he said.

Mistry said the housing sector was still fundamentally very robust as there is a shortage of residential units. With an estimated shortage of 20 to 25 million housing units, it would be a growth story for the next many years. "About 60% of India's population is below 35 years of age and they are going to need homes."