Our Bureau

Mumbai , June 15

Property prices in the country will drop in the next three to six months and home loan growth will slow down, Mr Deepak S. Parekh, Chairman, HDFC, has said.

"Property prices have already dropped by 20 per cent in places such as Noida. In the next three to six months, prices will fall by 10-20 per cent across the segment," he said.

According to Mr Parekh, investors who borrow from banks and financial institutions and buy property to sell later have moved out.

"These investors have realised that by the time the houses are constructed, the prices would have fallen. Builders will now only find actual users as customers," Mr Parekh said.

On the question of raising interest rates, he said HDFC would review rates if the cost of funds increase in the next one or two months. "The cost of funds are bound to increase but at the current moment we are reasonably comfortable," he said.

He said that interest rates on vehicular loans such as cars, trucks and scooters had inched up from 6 per cent to 11 per cent in past six months but in the case of home loans the rise has been only from 7.5 per cent to 9.5 per cent.

With respect to the recent reports on the possible split between HDFC and Chubb, in the general insurance joint venture, Mr Parekh said there were differences on the business model that was to be adopted by the partners and a clear view would emerge in the next two months.

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