"Housing loans can be a bit sluggish because buyers feel there is no way of getting properties at a reasonable price, (and) they are postponing their purchases," NHB chairman and managing director RV Verma told reporters here over the weekend.

Since April, home loan growth has been 16-17%, which is 1 percentage point lower than the previous fiscal. He further said he sees credit offtake lower at over 15% for the full fiscal.

Verma, however, maintained that it is the booming property prices, rather than the repeated rate hikes by the Reserve Bank of India, that is affecting demand.

"I think the main reason for the current sluggishness is the high property prices. If property prices come down, there could be an increase in demand even if the interest rates go up a little," Verma said.

The central bank has increased key short-term rates by a record 12 times over the past 18 months, with an eye to tame uncomfortably high inflation, which stood at 9.78% for August.

Home loan buyers, especially those who are on floating interest rates, are one of the worst-affected categories of buyers hit by higher interest rates, as the cost of servicing loans obtained at lower rates has gone up.

Verma said the housing regulator has asked housing finance companies to monitor loans, especially those at floating rates, closely to look for any signs of stress building up.