"There is no doubt that the market has got subdued at this moment temporarily because of mortgage rate and monetary policy," he told reporters when asked about an industry report that claimed residential property sale dropped by 70 per cent in May-June this year.
Singh, who released industry chamber Assocham's report on real estate, said he did not have the statistics but his gut feeling was that the cooling happened because of high interest rates.
"I am sure once the interest rates drop, demand will pick up," he said. ICICI Bank managing director and CEO K V Kamath had on Monday said that high interest rates would cause a slowdown in mortgage-backed loans and impede growth of industrial sector.
Already, light engineering and transportation sectors have been hit, he had said, while pitching for a cut in rates to sustain the competitiveness of Indian industry as well high economic growth.