If you look at RE market in last 3 years, it has been following the textbook pattern of a 7-8 year cycle.
2007 flat prices peaked (previous cycle). Assume imaginary index for RE(IMex)=100
2008 prices crashed IMex =80 (Bears scream crash crash)
2009 RE firms got into debt trouble and there were distress sale of plots (Vatika plots GGN) and flats (Unitech Uniworld gardens 2 GGN). Many affordable flats were released. Imex = 70. (Bears keep screaming crash crash although crash is already over)
2010 Prices stabilised and went back to peak 2008 levels. IMex=100
(Bears scream crash crash - since prices are rising, they say crash is imminent)
2011 Prices stabilised, fresh inventory being continuously sold. Imex = 130
(Bears scream crash crash - just more imminent)
If we have a normal cycle, then we can expect:
2011: stable prices for rest of the year, rates reach peak of BAse rate 10%. IMex=130 (Bears scream crash crash continuously, always around the corner)
2012: Decline in sales, end of industrial cycle upmove, poor economic performance. Lowering of rates by end of 2012, Bank base rates 8%. IMex= 100(Bears scream crash crash and say - I told you so!!!!)
2013: Delivery of inventory initial pipeline coincides with lower rates, good resale with loan possibility, industrial cycle starts upmove. Base rate 7%, IMEX= 140. (Bears scream crash crash - prices are not sustainable)
2014: Good stock market performance, good economic performance and good RE price upmove coincides (for residential and commercial and real estate RE). Nifty 10,000, IMEx 250, Base Rate 6%. (Bears scream crash crash - more imminent)
2015: Massive performance by nifty and real estate. Nifty 14000, IMEx 400, Base Rate 6% (Bears scream crash crash - but many people start to doubt the bears - they have cried wolf for 7 long years. By end of 2015 everyone decides it is stupid to stay out of RE market, because it keeps rising - so they all go and buy. Bears scream crash crash but no-one listened because they have been screaming this always)
2016: Continued delivery of flats results in massive oversupply, Real estate crashes. Massive inflation causes Rates jacked up to Base rate 12%. Currency crashes. Nifty Crashes to 9000 levels from 15000. IMEX crashes to 250 levels from 500. (Bears scream crash crash - I told you so!!!!!! - but poor suckers lose all their money, having timed their entry all wrong - they swear off real estate and stocks for ever
2017: Indistrial and RE cycle starts all over again.
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