Past Fall and Recovery analysis in the past decade

In the previous housing downturn in 1996 when real residential prices fell 40% over three years following which the market witnessed a prolonged slump over five years before recovering. Although a sharp slowdown appears underway, mitigating factors such as favorable demographics, low mortgage penetration, falling interest rates and ongoing infrastructure demand may keep the downturn from being protracted.

Risks of a significant correction in primary residential prices mainly due to low affordability in residential sector.

The Real Estate Cycle - Fall and Rise of 10 Years in Mumbai, Delhi, Chennai, Bangalore, Kolkata and Pune
Source: Knight Frank, Goldman Research

What is the Likely Scenario of Correction this Time ?
Some arrogant Realtors are still licking the A$ of FM without any reduction in property prices. Like I said in my previous post, liquidity is really really tight for Realtors and Banks have said that they will not restructure the loans and want them to be recovered before Feb-09 otherwise they will end up as NPAs in bank's books closing March-09.

The big buyers in Indian Realty was the NRI community, first home in US / Europe, Second and sometimes even Third for speculation in India. But please be assured for now, NRIs are busy protecting their own jobs, forget about them BUYING in Indian Realty.

As we end 2008, Realtors will be under increased pressure and will start liquidating. Caution - Do not opt for the low cost housing which they have started to market [when they will be ready ? god knows]. Go for projects ready to occupy or atleast under execution but at your / CONSUMER rates :-)