Need more than rate cuts to push housing sector
Property market experts are of the opinion that there is little that can be done to rekindle the sagging housing market activity, according to a recent Reuters poll. The survey also predicts that house prices are expected to rise just 1% on an average this year and 2% in 2020. These are the lowest growth figures since the poll was initiated 2 years ago. They are also less than the 3.15% rate of consumer price inflation currently.
Despite RBI’s monetary easing policies, banking and non-banking financial companies (NBFCs) are still grappling with very large bad loans, thereby making the economy liquidity- starved. The effects of the dismal performance of the housing sector could spill over to the rest of the economy as the real estate market is a source of employment for millions.