HDFC Chairman Deepak Parekh on Friday expressed confidence that the economic slowdown is only temporary in nature, and said there are adequate opportunities in the affordable housing segments of the real estate sector.

“Evidently, there has been a distinct slowdown in the economy, which was reflected in a lower GDP growth of 6.8 per cent in 2018-19. While there has been an across-the-board slowdown in consumption, given the inherent demand and low penetration levels, I do believe this is temporary in nature,” he told shareholders at the AGMof the mortgage lender.

He also stressed that there remains “adequate demand” for affordable housing across the country due to the government’s schemes and incentives to increase the supply of affordable homes. While the demand for commercial real estate has been buoyant — especially across the top eight cities — Parekh said the challenge in the housing sector has been with the upper-middle segment and high-end luxury housing, where unsold inventory is high for apartments of over ₹2 crore.

He also said that while the Reserve Bank of India has taken steps to improve liquidity in the NBFC sector, the challenge is of risk averseness by banks.

“Banks are reluctant to lend and there has been a flight to safety where a select, few, high-rated NBFCs and housing finance companies (HFCs) have access to funding, while for several others, access to credit has been choked,” he noted.

Parekh said that HDFC is open to acquire smaller HFCs if there is an attractive opportunity.

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