Indian housing demand structural in nature, says Deepak Parekh

Demand for homes is coming from a combination of first-time buyers, customers moving up the property ladder by shifting to larger homes or acquiring a second home in another location, Parekh said. (Abhijit Bhatlekar/Mint)Premium
Demand for homes is coming from a combination of first-time buyers, customers moving up the property ladder by shifting to larger homes or acquiring a second home in another location, Parekh said. (Abhijit Bhatlekar/Mint)
 1 min read . Updated: 22 Apr 2021, 12:28 PM IST Shayan Ghosh

NEW DELHI :

Mumbai: The demand for housing being witnessed in India at the moment is not pent up, but structural in nature and is here to stay, said Deepak Parekh, chairman of mortgage lender HDFC Ltd.

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Demand is coming from a combination of first-time home buyers, customers moving up the property ladder by shifting to larger homes or acquiring a second home in another location, Parekh said at One World One Realty Digital Summit 2021 on Thursday.

“With the work from home option, the proximity to one’s workplace is perhaps less compelling. So, there are wider options in terms of locations when buying a home," he said.

Parekh said that due credit must be given to the government for its focus on the ambitious housing programme. Under the Pradhan Mantri Aawas Yojna (PMAY), as of 31 March 2021, an estimated 11.3 million homes have been sanctioned, he added.

“This has been a game changer for the housing sector as the ultimate objective is building a more inclusive and a property-owning democracy. One cannot talk about sustainability if the benefits accrue to only a small privilege segment of society," he said.

He said that despite being associated with the housing sector for over four decades, the strong demand being witnessed now has certainly been surprising.

According to Parekh, technology has enabled developers to virtually showcase their property and home loan providers to leverage their digital platform to continue to serve new and existing customers. He believes that now, more than ever before, the role of technology and innovation become extremely important.

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“Today there is so much of talk about fintech, healthtech, edtech but property technology or proptech is still in its infancy. The construction industry is one of the least digitized sectors in the world," he said, adding that it is estimated that the real estate sector spends less than 1.5% of its revenues on technology.

To my mind, capitalizing on technology for the real estate sector will improve governance, said Parekh, adding that 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. This will bring in much needed transparency and accountability and improve cost efficiencies also in this sector," he added.

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