The rapid rise in housing prices could spike general price levels and pose a danger to financial stability, the Reserve Bank of India (RBI) said today, ahead of its quarterly review tomorrow.
"A sustained and rapid rise in housing prices over successive quarters remains an area of concern from the standpoint of their possible spillover to demand pressures and the general price level as well as financial stability," RBI said in its macroeconomic review.
However, the prices in the housing sector remained flat during the last quarter of 2009-10, the central bank said, adding that housing prices displayed subdued momentum in several cities, mostly due to concerns of high valuations and the volatile stock market during the period.
Among major cities, prices of real estate (housing) increased by 27 per cent in the fourth quarter of 2009-10, while the rate of growth in Mumbai was a mere 1 per cent.
As far as credit off-take in the housing sector was concerned, advances in the sector registered a growth of 9.6 per cent on a year-on-year basis.
The outstanding housing loan at the end of May 21, 2010, stood at Rs 3,05,325 crore, 52 per cent of total retail credit.
