Even while the real estate sector has experienced higher housing credit growth and more beneficial bank lending rates, house prices across the country have seen very slow growth over the last five years, reports Press Trust of India.
The Financial Stability Report issued by the RBI on Monday (31 December 2018) has revealed that the all-India housing price index reduced to 5.3 per cent in April-June 2018 and that housing credit has declined to 15.8 per cent, while these figures were 16 per cent and 17 per cent respectively in Q1 of FY15.
“Housing prices have been cooling in the last five quarters, despite accelerated housing credit growth and favourable bank lending rates,” the report stated.
The moderation in price growth is due to the large inventory of unsold houses caused by weak demand.
As per property consultant JLL India, 2018 has seen housing sales across seven major cities rise by 47 per cent, albeit on a lower base.
“There has, however, been a pick- up in house sales in first half of fiscal 2019 leading to a reduction in unsold inventory, thereby improving the house sales-to-inventory ratio for major cities,” it said.
The report also details how the current spike in launches is in large part due to of government affordable housing schemes.