The paper studies the impact of permanent shocks to housing prices attributed to monetary variables and income growth - and, in the process, attempts to identify speculative price bubbles in the housing market.

The data suggests that the housing market in India at present remains "fairly well equilibrated if seen in terms of the proximity of the actual housing prices and the estimated long run equilibrium housing prices. This implies that the risk of speculation in the market is not yet materially significant".

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http://www.inrnews.com/indianrealestate/2006/10/rbi_study_indicates_risk_of_sp.html

By INRnews Correspondent

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