Rajan’s Compelling Argument on Realty Prices

Reserve Bank of India Governor Raghuram Rajan hit the nail on the head when he argued for a cut in property prices in the face of high inventory of unsold flats in the country. In an interview to a TV channel, he said, “If real estate developers, who are sitting on unsold stocks, start bringing down prices, that will be a big help to the sector because once there is a sense that prices have stabilised, more people will be willing to buy.”

Rajan raised genuine worries about an unsavoury scenario that has persisted for a little too long in this sector—of prices remaining high and demand failing to pick up. “I think we need the market to clear, and with growing unsold stocks, we need to figure out ways to do it,” Rajan, lionised the world over as a top-notch economist, was quoted as saying. The RBI Governor’s statement has been lauded by many economists because the property sector in India is currently struggling with a slide in demand and high inventory of unsold flats.

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