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Do you expect real estate prices to crash by the end of the current financial year?
Yes. Shubhada Rao, Chief Economist
YES Bank The global financial crisis will affect real estate prices. We have already started seeing a significant correction across different geographies. Taking into account the correlation between the equity and real estate markets, the correction in the stock markets clearly indicates an imminent correction in the real estate market.

     Print Edition: November 16, 2008

The fortnight’s burning question.
Do you expect real estate prices to crash by the end of the current financial year?

Yes. Shubhada Rao, Chief Economist
Yes Bank The global financial crisis will affect real estate prices. We have already started seeing a significant correction across different geographies. Taking into account the correlation between the equity and real estate markets, the correction in the stock markets clearly indicates an imminent correction in the real estate market.

Maybe. Anshuman Magazine, MD, CB Richard Ellis
The real estate market has slowed down, but prices have not fallen in tandem with this. I think the overall market is undersupplied because of high interest rates and negative sentiment among developers. But if demand doesn’t catch up, developers will be forced to reduce prices.

No. Kabul Chawla, MD, BPTP
Real estate developers have already reduced prices of various projects across the country following a slump in demand. Consequently, their margins have been squeezed to around 20-25 per cent, leaving little scope for any further reduction. There is still pent-up demand for new housing projects and I expect demand to pick up once interest rates fall.

Manu Kaushik

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