RBI steps up move to track realty prices

Likewise, the apex bank, has recommended that this be done at transaction level from top 13 centres in the country: Greater Mumbai, Chennai, NCR Delhi, Bangalore, Hyderabad, Kolkata, Pune, Jaipur, Greater Chandigarh, Ahmedabad, Lucknow, Bhopal and Bhubaneswar.

Observing that housing and mortgage finance activities are now most happening segment in asset price market, RBI said, it has become contingent to monitor price movements of financial assets like equity and houses, lest unintended price rise leads to speculative investment by households that would be deleterious for growth and consumption in an economy.

These decisions follow recommendations made by nine-member Expert Group on Asset Price Monitoring System headed by RBI Department of Statistics & Information Management Principal Adviser Dr Ambadas Pedgaonkar. The recommendations come following need for finding realistic measure of aggregate house price in order to understand the behaviour of house price and their influence on country’s economy.

Engine of growth

Pointing out that real estate activity represents key engine of economic growth and residential as well as commercial house property forms important part of asset formation, RBI said, for monitoring purpose, both sale/resale price index be tracked as well as rent index of real estate prices on regular basis. Stating that compiling real estate price index be done on quarterly intervals, RBI stressed the need for supplementing bank data through surveys conducted annually to ensure robustness of data available with the banking system.

The recommendations seeks to address lack of transparency in residential property market transaction, absence of single centralised regulator and limited availability of price information posing challenge in tracking real estate price dynamics and their relationship with financial stability and monetary policy.  The other members include National Housing Bank Principal Adviser Raj Pal, Indian Statistical Institute Prof Bimay Roy, Centre for Economic & Social Studies Director Prof Manoj Panda, Central Statistical Organisation Deputy Director General G M Boopathy, HDFC Realty CEOGautam Bhagat, SBI Deputy General Manager (Home Loans) Anuradha Rao, ICICI Home Finance DGM Abhay Sakare and RBI Internal Debt Management Department Director Sanjoy Bose.

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