22 MAR, 2013, 02.21PM IST, ET NOW Interest exemption on housing loans will provide boost to the sector: Keki Mistry, HDFC *In an interview with ET Now, Keki Mistry<http://economictimes.indiatimes.com/topic/Keki-Mistry> , Vice Chairman and CEO, HDFC Ltd<http://economictimes.indiatimes.com/hdfc-bank-ltd/stocks/companyid-9195.cms>BSE -0.23 %<http://economictimes.indiatimes.com/hdfc-bank-ltd/stocks/companyid-9195.cms>, talks about the Budget's impact on the housing industry and shares his business outlook. Excerpts:*
*ET Now: The budget had some positive measures for the housing industry. What is your outlook on growth for the housing industry and then the housing sector?* *Keki Mistry: *The demand for housing loans<http://economictimes.indiatimes.com/topic/housing-loans> has been very strong. For the first nine months of this year and in the individual housing loan category, when we add back loans sold in the last 12 months, we had a growth of as much as 31%. So it has been very strong growth in the first nine months of this year. In the finance bill <http://economictimes.indiatimes.com/topic/finance-bill> that was released a couple of weeks ago, there is a new provision which says that for a middle income customer -- who is buying a home for the first time, provided his loan amount is less than Rs 25 lakh and the property value is less than Rs 40 lakh and he takes the loan any time after 1st April 2013 and before 31st March 2014 -- there will be an added tax deduction of Rs 1 lakh towards interest. This is an addition to the existing benefit of Rs 1 lakh 50 thousand which is there. Now this Rs 1 lakh benefit can be availed over a two-year timeframe either in 2013-2014 or 2014-2015. Something like this will act as an incentive and more and more people will want to buy a house during this period and therefore will need housing loans today. It is early days to say what kind of growth numbers we will see, but we definitely see this providing a big fillip not just to the housing sector, not just in terms of demand for housing loans, but also more so in terms of providing support to the core economy<http://economictimes.indiatimes.com/topic/economy> because as we know housing supports a number of other industries as well. There are around 276 big and small industries in India which depend on the housing sector. The big ones being cement, steel, paint, and the small ones being nuts and bolts. So effectively by encouraging the housing sector, you are providing support to all these other industries. *ET Now: Urban income has been slowing while demand remains strong in tier II and III cities. What is the growth rate that you see in the tier I and II cities as well as in III?* *Keki Mistry: *If you look at it in terms of locations, the largest business would be from the Delhi NCR region, from Chennai, from Mumbai and from Bangalore, followed by Pune. Business originates not just in cities, it is everywhere and includes the city outskirts also. For example, if you look at Pune, it would include places like Satara, Sangli, Kolhapur, Solapur, Aurangabad and so on. Therefore, growth is happening everywhere not just in the tier I cities, but in the tier II and tier III cities as well. *ET Now: Give us some sense on the colour of the loan growth that you are seeing in the retail wholesale book for HDFC.* *Keki Mistry: *We have seen the December results. The individual loan book<http://economictimes.indiatimes.com/topic/loan-book> is as much as 31%, non-individual book increased by about 16% giving an overall increase of around 25 percentage. *ET Now: Overall, what is the kind of loan book growth that you see over FY14 and FY15?* *Keki Mistry: *It is difficult to make a projection for what is going to happen over the next one year, but I would expect that the growth would continue to remain strong especially given the fact that now there are these initial tax benefits provided to individuals for buying houses. *ET Now: Give us some colour on how are the spreads shaping up for your retail business and for your wholesale business. Overall do you see spreads remaining stable?* *Keki Mistry: *Yes <http://economictimes.indiatimes.com/topic/Yes>, spreads have been stable. As of December, they were 2.28%. If we breakout that 2.28% between individuals and non-individuals, individual spreads were at 1.95%, non-individual spreads were at 2.79%. Even incrementally if you were to look at the month of January and February, spreads have remained in the same range. So incremental loans given in Jan and Feb have been more or less the same. -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/globalspeculators?hl=en. For more options, visit https://groups.google.com/groups/opt_out.
