“I remember saying on one of his shows that the economic recovery is going to be a lot faster than people expected, and that’s exactly what happened,” said Keki Mistry, VC and CEO of HDFC, speaking to ET Now .
When COVID first emerged last year, we saw a lot of people were skeptical, people were saying that it would be a long time before recovery came back and that there was going to be a big problem and so on. and we saw how quickly the economy recovered. I remember saying in one of your programs that the economic recovery was going to happen much faster than people expected, and that is exactly what happened. slowed down a bit in April and May, but now in June, as you said, things have stalled and the number of cases has dropped significantly from the peak and we see that in most parts of the country daily activities are continuous, for example I’ve been coming to the office every day since June or July last year and I’ve seen the traffic on the street increase every day and now the traffic I have when I enter the office is almost as it was before – COVID times was so everything is back to normal.
Little by little the economy will get back on track very, very quickly, we’ll see it as early as June and I have a feeling that the momentum is only accelerating with every month that goes by, the only risk I have on the horizon see is the third wave. If you look at the hotel industry, you would above all expect a significant effect from Covid on the industry. However, if you try to book a hotel today, you will find that almost all hotels are fully occupied. Especially in hotels that are located near large cities, people are tired of staying at home every day and therefore look for them a kind of outlet to go out for a weekend in a good place. There is no doubt that the economy is recovering. Unfortunately, the second wave’s health crisis was significant, but the economic impact would be less for the second wave than the first, in my opinion.
There may be some effects on confiscation in the short term, but it may not have a very large effect. In the future, however, you need to understand that a home loan is an extremely safe form of loan because the person who has taken out a loan has mortgaged the property it is on and people will not want to do anything about the property to endanger the number one property.
Second, we are co-borrowers on most of our loans, so it is both spouses who have taken out a loan in case either of them has trouble with their job or salary, or whatever the other person can take on. of the credit service.
Third, most importantly, our average loan-to-value ratio at the time of granting is extremely low and all of our loans are repaid in monthly instalments that start immediately, so the person’s actual equity is no chance they will want to risk losing that property. There are laws in India that allow you to take possession of the property and the auctions if it is seriously violated. In most cases it won’t, but the threat is always there.
On the growth side, COVID was somewhat positive for the housing sector. In cities there is this trend where six to seven people live in a 400,500 square meter apartment with one or two bedrooms. Affected by COVID then it spreads to the rest of the family very quickly as it is very difficult to do social distancing in a small area. COVID has made it more urgent for people to look for bigger homes, even if it means a bit more travel. Hence, housing demand would likely pick up or increase due to COVID, but structurally, housing construction in India has always had the potential to grow very strongly and we saw it towards the end after the first wave ended. In March 2021, our payouts were much higher than ever in HDFC history. During that period, we have paid out more than 16 billion million home loan purchases. 13,000 and we’ve seen this trend with every month since June 2020, that number we talked about was higher than the previous increase.