Also, a substantial overhang of vacant homes, either for sale or in the foreclosure pipeline, continues to hold down house prices and reduce the need for new construction. While these headwinds on both the supply and demand sides of the housing market have clearly started to abate, the recovery in the housing sector is likely to remain moderate by historical standards.
It was also agreed to explore the possibility of extending the scope of the relative RBI circular addressed to the banks, to the financial institutions also so that they too would undertake due diligence and proper appraisal in financing of projects rather than merely relying on the State Government guarantees in their favour.