High rates cool real estate demand : K P Singh

High lending rates, triggered by the Reserve Bank's tight monetary policy, have tranquilized the country's property market, but demand will surge once rates dip, real estate firm DLF's chairman K P Singh said today.

"...Because of mortgage rate and monetary policy, there is no doubt that the market has got subdued at this moment temporarily," he told reporters when asked about an industry report that claimed residential property sale dropped by 70% in May-June this year.

Singh, who released industry chamber Assocham's report on real estate, said he did not have the statistics but his gut feeling was that the cooling happened because of high interest rates. "I am sure once the interest rates drop, demand will pick up," he said.

ICICI Bank managing director and CEO K V Kamath had yesterday said that high interest rates would cause a slowdown in mortgage-backed loans and impede growth of the industrial sector.