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Wait! Property prices to fall further!

December 30, 2008

'Do deewane shehar mein, raat mein yaa dopahar mein,
Aabodana dhoondhte hain, ek aashiyana dhoondhte hain. . .'

These lines from the 1977 classic Hindi film Gharonda would, in brief, encapsulate the struggles that most people go through while buying a home, especially so in the last 2-3 years.

Residential property prices crashed in the mid-1990s, and it took till 2002-03 for them to start rising again. When they did, however, the progress was rapid. Within a short span of time, the prices had risen so much that the budget buyer, who comprises the bulk of the market, was left out in the cold.

This would possibly have continued had real estate developers not been overtaken by international events of a scale that they could not anticipate. The US sub-prime crisis triggered recessionary forces globally. That, in turn, crashed volumes in the Indian property market to a trickle.

"Going forward, the market will remain slow and transaction volumes will remain low," says Anshuman Magazine, chairman and managing director, CB Richard Ellis South Asia, a realty consulting firm.

For homebuyers though, things are getting better. A correction in property prices is already underway. In the following paragraphs, we try to figure out what you should do if you are in the market to buy or sell, and how to arrive at a reasonable price, give or take a bit, at which to strike a deal. Read on. . .

Text: Pankaj Anup Toppo

Image: The living area is seen in the showroom apartment. | Photograph: REUTERS/Nigel Roddis

Also read: An engineer from IIT, now a farmer

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