Despite the announcement by RBI to further increase the interest rate, HDFC is estimating increase in house loan borrowing by the middle class as India is still having low penetration in housing loan sector. The housing loan penetration in India is 9% of the GDP against the 80% in US and UK.
For the quarter ended March 2011, the company has posted a rise of nearly 20 percent in loan disbursements 603.14 bn rupees ($13.5 bn).
Factors like Strong economic growth, rising consumer confidence and the launch of attractive products has lifted the sentiments of the middle class towards availing home loan. But the higher interest rate and further increment may play spoilsport.
The company has announced that the spread for such loans i.e. the difference between borrowings and lending would remain in the range of 2.15 percent to 2.35 percent.