Housing prices to see price correction soon: NHB

Citing over-supply, Verma said the construction industry can take a project-specific or builder-specific approach to see how they can correct prices.

"Projects that are unsold due to the high price perception may see some price correction partly in the light of current downward revision in the housing loans," he told reporters here while announcing NHB's annual results for the financial year ended June 30, 2012. However, he did not give any specific timeline for such a correction.

"There is a psychology of over supply which will play out during the year in the form of price correction and becoming more market oriented," he added.

He said the NHB will plug the supply side gap by looking at reducing refinance rates, especially for those projects that promote innovative proctices in the design of the building, land management, usage of low-cost but durable material and the latest technologies.

Incidentally, banks including SBI, HDFC, ICICI Bank, Punjab National Bank, and Vijaya Bank have brought down home loan rates. NHB recently reduced its refiancne rates for housing loans up to Rs 2 lakh from 10% to 9%, and for loans of Rs 2-5 lakh from 10% to to 9.25%.

Referring to reports of inventory pile-up,

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