Consider the following statements: With an overall objective of bringi

Consider the following statements:
With an overall objective of bringing transparency in the Indian real estate market, the housing price index is expected to serve some highly important and timely purposes:

  • Whether a broker is quoting too high a price for houses in the cities.
  • Banks/housing finance bodies will be able to estimate only if the loan applications are realistic for the properties.
  • This will also show the level of performing assets in the housing sector.

Which of the above statements are correct ?

1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
This question was previously asked in
UPSC SO-Steno – 2018
Statements 1 and 2 are correct.
A transparent housing price index provides valuable market data. Statement 1 is correct because the index can help potential buyers or sellers gauge whether a quoted price is reasonable compared to market averages. Statement 2 is correct because banks rely on market data to assess property values when considering loan applications, ensuring that the loan amount is appropriate relative to the collateral’s worth. Statement 3 is incorrect; a housing price index tracks property values, not the repayment status or ‘performing’ nature of housing loans, which is a measure of asset quality for lenders.
Housing price indices contribute to market transparency and efficiency, benefiting buyers, sellers, lenders, and policymakers. However, they are distinct from metrics that measure the health of the loan portfolio itself.
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