Can real estate prices crash 70%?

[msn1270]

Correction is Inevitable. But its a matter of time. In the western market, Real Estate have bubbled out to the levels of 1980's to 1990's. In European countries, there are no buyers at all for any new projects.

But in india, Due to Government support through PSU's Developers are still waiting for their hopes and artificially hyping the situation in the name of Real Estate demand is picking up and slowly rising the prices to tempt the buyers/speculators to jump into the field.

The Question is, How long they can pretend like this and buyers can check their patience.

1) Recently the country's larget Real Estate Developer is selling its Insurance Business and Non-Core business in order to fetch money for the landbank transaction it has done in the Peak season. If there is a real pick-up in Buyer's Demand, was there a need for DLF to sell its assets?

2) Around 15 Real estate Companies(Godrej Properties, Lodha developers, Nitest Estates, Raheja, Emaar MGF, Radhe constructions....etc) are desperately waiting to release their IPOs to the stock market to raise funds for completing their ongoing projects. But they're unable to fix the Price Band for their shares as they're unable to judge the mindset of the investors at this stage. Investors have lost their hopes of the IPO's with their experience in the recent IPO's like Adani Power, NHPC, Indiabulls Power, ...etc all are limping below their Issue Price.

Now the question is if at all they had made solid money in the last 1 to 1.5 years and have cash in hand, was there a need to raise the fund through IPO's? Their problem is they all have purchased the Land during the peak season and unable to payback the amount to the land owners. If they don't pay, they may loose their downpayment also.

3) Recently Purvankara Projects made a big bash in the media, saying they're giving 2 BHK Flat at 14 lakhs and 3 BHK Flats at 19 lakhs with all amenities in Bangalore north. In reality, their project is at Doddaballapur - around 45 kms from Bangalore. It has not links to Bangalore city or the job Centred locations like White Field, ELectronic city, Baghmane Tech park, Global VIllage, ...etc. They fooled the bangaloreans.