- Experts skeptical that aggressive rate cuts will revive property market
- Risks to already-modest predictions skewed more to downside, they say
- RBI has cut repo rate by 1.1 percentage point to 5.40% so far this year
Liquidity-starved economy will restrain housing market activity and price rises in coming months and into 2020, according to a Reuters poll of property market experts who were skeptical aggressive interest rate cuts will revive it.
House prices are expected to rise just 1 per cent on average this year and 2 per cent in 2020, the lowest median predictions since polling began for the two years, and well below the current 3.15 per cent rate of consumer price inflation.
A majority of respondents in the August 13-27 survey said risks to those already-modest predictions were skewed more to the downside.
That comes despite the Reserve Bank of India having slashed its repo rate by 110 basis points so far this year, to 5.40 per cent. It is also expected to cut it further to 5.15 per cent over the coming months to revive a slowing economy.
However, much of that easing has not reached borrowers as banking and non-banking financial companies (NBFCs) are still grappling with very large bad loans on their balance sheets, which has led to a liquidity crunch