I'm not bullish on real estate: HDFC chairman Deepak Parekh
Deepak_parekh_hdfc Foreign investors may make a beeline to invest in the realty sector, the stock may go up and up in both India and other secondary markets, IPO offers may come at every second week, but for Deepak Parekh, the HDFC chairman, all reasons may sound too small and can not really excite him to the core. He is simply not bullish. In an interview he says real estate in India has to do with affordability, be it for residential or business purposes.
In the commercial space the boom is largely due to the IT and ITES sector and these companies don’t buy any property instead 90% of them are actually rented. And on top of this, ever increasing renting rates (Rs. 30-35 per square foot) can actually take away the cost advantage, where businesses may eye China or Vietnam as better alternative.
Contrary to perceived bubble, the chairman feels property prices will go down in the future. He cited example of Bangalore where growing suburbs like Whitefield experienced a dip in commercial and residential property rate between 10-30%.
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