HDFC Chairman Deepak Parekh said real estate prices might reduce by 20 percent due to the coronavirus outbreak.
Prime Minister Narendra Modi today announced an extension of the nationwide lockdown until May 3 to contain the spread of COVID-19.
“There has been a timely lockdown by the government. I hope it flattens the curve (of COVID-19 spread) and we come out strongly,” Parekh said, reacting to PM’s announcement.
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“In my experience, I have found the developers lot most resilient,” Parekh told CNBC-TV18.
“I understand that a number of developers may be worried given that a lot of fires had to be doused recently – RERA, GST, etc” he added.
He added that there is a need to incentivise migrants to return to the states and construction sites.
However, he pointed out that India is well placed to deal with the situation. “I don’t think we should be too gloomy about macros as we have adequate forex reserves. With oil prices falling, our current account will be in surplus. No country gets the kind of NRI remittances that India does,” he noted.
Parekh also highlighted the need for a waiver of stamp duty and registration charge on housing for a limited time like September-October period.
Charges such as IQR, TDR cost, and ULC will have to be staggered since no can clear the payment upfront.
Parekh said that the pandemic has merged health, economic and financial crises.
India, China and Indonesia are the only G20 countries that will record positive economic growth, Parekh said.
Stimulus measures given by most countries have been inadequate, according to Parekh.
The Reserve bank of India (RBI) needs to act quickly, Parekh said.
Emerging markets have been impacted more than others, he added. The HDFC Chairman said $90 billion of investments have flown out of emerging economies in March.
“Don’t think we have reached the bottom of the equity market,” Parekh said.
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