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New Delhi - High lending rates, triggered by India's central bank, the Reserve Bank of India's (RBI) tight monetary policy may lead to a slump in the realty market, the chairman of India's top real estate developer, DLF, has warned.
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"...Because of mortgage rate and monetary policy, there is no doubt that the market has got subdued at this moment," K.P. Singh, chairman, DLF, said, noting industry reports that claimed residential property sale had dropped by 70 percent in May-June this year.
"There is a slowdown on the mortgage side of the market," Singh said, adding that in spite of a slide in real estate prices, high interest rates were deterring people from buying new houses.
However, Singh said that the market slump was "temporary" and "once the interest rates drop, demand will pick up."
The central bank should reduce interest rates from a five-year high, Singh suggested.
"I don't agree with the monetary policy and I want the interest rates to be reduced," Singh, the second richest man in India, said at a press conference in New Delhi, September 18.
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