Low Const Activity Constrained Housing Demand: RBI
According to RBI's Financial Stability Report (FSR) , the suspension of construction activities across the country from mid-March delayed completion of under-construction housing projects and has constrained new demand. It said a nation-wide ebbing of consumer confidence triggered a preference for purchase of completed houses, which adversely affected the sale of under-construction houses. House sales and launches, which had declined by 16 per cent and 35 per cent (y-o-y) during the third quarter of FY20, were pulled down by around 26 per cent and 51 per cent respectively, during the fourth quarter. As new house launches plunged, the stock of unsold houses shrank and the inventory overhang (or average number of months required to sell a house) dropped. Under-construction projects constitute 70- 80 per cent of the unsold inventory. House price growth remained contained in most cities in 2019-20.
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