The days of exceedingly low home loan rates and special schemes are numbered.
But as banks get ready to phase out these schemes, customers are still rushing in to take advantage of the "teaser rates".
For home loan companies this has meant another quarter of strong growth in loan disbursement.
While the year is likely to end on a high for HDFC and home loan borrowers, the new fiscal is likely to bring higher rates and at least slightly slower loan growth.
Property prices especially in large cities in Mumbai and Delhi have started to rise. That together with a rise in rates could be a dampener for home loan demand.
But Karnad believes that rate hikes, if any, will only come towards the latter half of the year.
"I don’t think rates will rise by 50-75 basis points and that too towards the later part of the year,” said Karnad.
While HDFC is the undisputed leader in housing loans, the lender is also slowly increasing its focus in another niche market, that of education loans.
After acquiring controlling stake in a small education lender called Credila, the banking major is now looking to build that portfolio too.
While HDFC may look at small diversification moves, its core focus will remain on maintaining market share in the housing loan market, which they believe will continue to grow at an average of 20 per cent over the next year.
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