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Wednesday, June 30, 2010

**[investwise]** RBI To Launch A New Housing Starts Index

 

That a lot of grey areas exist in the Indian real estate sector is well known. And to bring some sort of transparency to this sector, RBI will soon be launching a house start index. This will help gauge activity in the construction sector. Housing activity is considered as amongst the important lead indicators of economic activity. This is because of its substantial forward and backward linkages with other sectors of the economy. The housing startindex already exists in the US. It is an important economic indicator there. 

Infact, the seeds of the global financial crisis were first sowed in the real estate and mortgage space in the US. And so the case for having such an index has already been strengthened. Infact, the RBI deputy governor Subir Gokarn opines that the core of any business cycle theory is what happens to the construction sector. This move may not solve all the issues plaguing the realty sector in India right now. But we certainly believe it to be a step in the right direction.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
 
Nothing in this article is, or should be construed as, investment advice.
 
 
 

 
 

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