NEW DELHI: The latest RBI report released on Friday said that even reduction of prices of residential properties failed to lift the spirit of the Housing market in the country.
It said that issues of funding faced by realtors particularly post IL&FS event kept the new launching of projects at its lowest position. It also said that consumer demand muted in the backdrop of subdued market conditions.
“Housing market activity remained muted in the first half of FY 2019-20. Major markets recorded softening of house prices in the last one year although such softening has not led to any buoyancy in sales as yet.” The report also highlighted the temporary impact of regulation in the realty sector.
“The implementation of the Real Estate (Regulation and Development) Act (RERA) brought about a certain discipline and consumer safeguards in the housing market specifically with regard to funding of new housing projects and this resulted in real estate companies becoming more cautious about new launches in the short run,” said the report.
It added that the setback to the sector on account of RERA is expected to be transitory even as it brought about funding discipline and end-use restrictions of advance money from home buyers.
“Issues of access to funding faced by realtors were brought into sharp focus following the adverse developments in the non-bank funding channels post IL&FS event.
"Consequently, new house launches fell sharply, although unsold inventory is at a multi-year low.” It also mentioned the government’s attention towards liquidity crisis in the realty sector.