Is price correction imminent in Indian Real estate?

My uncle, who is a well-to-do businessman just shifted to Mumbai. He wanted to purchase a house of his own. But as fate had it, after doing a lot of research he realized that it was impossible for him to afford a house in proper Mumbai. Rather, he can only afford something in the outskirts. Today it has become impossible for even an upper income group family to own a 2 BHK flat without taking a loan and putting pressure on his future in the form of EMI. It seems like there is no end to this ever increasing prices.

Though, I believe that price correction in real estate is inevitable. I have my own reasons.

Reason 1: Top real estate companies such as DLF, IndiaBulls, Oberoi and Prestige are trading far below their Jan 2009 prices when realty index was at its peak. Companies are in desperate state to trigger sales-volume recovery and generate cash flows. Companies also want to do away with rising unsold inventory.

Reason 2: The prices have risen to such an extent that it has become difficult for people to own a house. The market has become investor driven where prices keep on increasing just because of change of hands of the property at mutually determined rates. Lack of affordability leads to low demand.

Reason 3: Until the government relaxes the CRR and the repo rates, there is no reason to believe that there would be any relaxation with respect to the mortgage rates. With the election closing in and the pressure due to inflation, this relaxation in monetary policies seems highly unlikely.   

Reason 4: With decreasing GDP and rising corruption, investments and growth in companies are considerably low. As a result, salaries have not appreciated at the same pace as the real estate price appreciation. The buying power has reduced considerably.

Though all reasons aside, it might be noticed that the prices of the properties newly launched may be held strong by the developers. But secondary market prices should depreciate. And the after effects of the secondary market will definitely show in the prices of primary market in times to come. In fact, developers in Mumbai have already started offering 20:80 subvention schemes to generate sales. Research has shown that these subvention schemes account for 10% to 12% discount of the acquisition costs.

I assume that post this price correction will be the best time for home buyers to go bargain hunting. Though, it is advised that they do a proper due-diligence before making a purchase. 

My uncle should feel happy after reading this article. He might just be able to afford his dream home. :)