Housing set to become more affordable: NHB

Housing finance firm regulator NHB today said there may be "some price correction" in the housing segment as there is inventory build-up in some areas.

NHB's chairman RV Verma said that there is inventory build up in some areas and such projects which are not selling on account of high price perception may see some price correction partly in the light of current downward revision in the housing loans.

Most banks including private sector banks have reduced interest rates. ICICI Bank has cut home loan rates by up to 100 bps. HDFC, the largest housing finance company, has also reduced rates for loans up to Rs 30 lakh to 10.25%. "There is psychology of over supply which will play out during the year in the form of price correction and becoming more market ori-ented," he said, adding that it would be difficult to say how much price correction could take place.

Finance Minister P Chidambaram in his meeting with heads of public sector banks in August had pointed out that close to 5 lakh flats were lying vacant in Mumbai despite robust demand for housing. The government has now empowered the National Housing Bank, to identify viable projects across 10-15 cities in the country.

NHB will identify those projects and then will build a consortium, which will lend to these projects. Last month, financial services secretary DK Mittal had met bankers in Mumbai to take stock of credit flow towards real