To India’s mortgage-to-GDP ratio to cross 20 per cent, housing loans will have to grow exponentially:Deepak Parekh, chairman of HDFC Ltd

“At this juncture, we are awaiting regulatory guidance on the path forward. We remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level,” Parekh said in his note to the shareholders of HDFC.

“My only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction. More than ever before, we need your trust and support,” he said, adding that the optimum path to scale up housing finance was to be housed within a banking structure. The pool of resources for lending will be significantly larger and at lower costs.

Commenting on the Indian housing finance market, he said, the country should be able to double the size of its home loan market to around $600 billion in the next five years.

“This would coincide with the period when India attains its much-aspired goal of becoming a $5-trillion economy. Despite the doubling of housing loans, India’s mortgage penetration would still remain low at an estimated 13 per cent of GDP,” he said.

Parekh said in order to take India’s mortgage-to-GDP ratio to cross 20 per cent, housing loans in India will have to grow exponentially in decades to come.