Bangalore: Despite the fact that the real estate market is going through a volatile phase, the property prices remains rigid and inflexible, published in Reserve Bank of India’s (RBI) macroeconomic and monetary development report.

Property markets are facing moderation in demand, but price correction has not occurred as real estate firms are holding land banks and slowing new launches and sales to retain pricing power. Higher housing loans coupled with price rigidities in the housing market reflect the continued pricing power with the developers as also the increasingly stretched balance sheets of residential buyers, as per the RBI report.

Housing loan in the second quarter of 2011- 2012 have grown at higher rate compared to the previous quarter even when the overall credit off-take is decreasing.

Senior official, Bank of Baroda said that “Retail loans, especially home loans have been growing at a steady pace. It is the corporate credit that has fallen. Demand for home loans up to 50 lakh has been witnessing growth,” reports Financial Chronicle.

According to SBI official, there is a huge demand for home loans despite the hike in interest rates of home loans. The home loan segment is rising at a speedy rate without any signs of decline.

The report further describes that the Reserve Bank’s quarterly House Price Index (HPI), based on the data on transaction of properties collected from the registration departments of respective state governments, now covering 9 cities indicates a hike in (quarter on quarter) q-o-q prices in all cities during June to September 2011except for Bengaluru. On the other hand, the data on volume of transactions for the same period show increase in the number of transactions in six cities, except Mumbai and the recently included cities of Kanpur and Jaipur.