June 2012 ~ Property exhibitions have been cancelled. Sales have dried down (especially in the Premium segments – read South Mumbai). Real Estate Developers are doling out freebies to keep up sales. Everything is being done tomaintain the price levels at the same levels as 2007-2008. 

Are houses within means of ‘Aam Aadmi’.? – Resoundng answer is NO
Take an example of Thane area. 2 BHK apartments (around 900sq ft super built up) are available upwards of 75 lacs+, in decent multiplexes. These match box apartments are gradually getting beyond reach for first time buyers, especially with rising inflation and interest rates and slowing economy. Things are even more difficult for people who want to upgrade from 2 BHK. 
Indeed, it appears like a huge scam of the PE Investors ~ Real Estate Developers ~ Politicians. The PE Investors make an investment in the properties in the beginning and are assured a return. The real estate developers cannot being the prices down due to high land prices. And of course the involvement of Black money holds/supports the property market.
Wherein, the ‘Aam Aadmi’ ~ working middle class gets milked for life, when he makes the single largest purchase of his life – a highly inflated and highly priced “12 walls in air” -a Home – literally mortgages himself for life by paying EMI’s  for 20+ odd years ~ working 13-15 hours a day, travelling in pot-holed roads, never ending jams, and over burdened repulsive mumbai local trains. 
Reminds me of a story of the frog kept inwater which is slowly being heated to boil. The frog happily keeps adjusting to the temperature, never realizing the danger of the rising temperature & the boiling water , which ultimately consume his life. 
My personal view (which I hold every right to be wrong :-)) is that the the real estate market is ripe for correction, especially in Mumbai. No asset keeps giving Y-O-Y returns of 25-35% CAGR which has been the case in real estate market since year 2003. 
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Not just buyers, but Mumbai developers too are feeling the pinch of the overheated real estate market owing to  poor sales. This is evident as three property exhibitions have been cancelled in Mumbai until further notice.

Maharashtra Chamber of Housing Industry (MCHI) did not directly blame poor sales for this but mentioned some policy paralysis with civic agency, reports Business Line.
Are actual home buyers really going to bother with exhibitions when most houses in Mumbai are way beyond the aam admi’s means. Reuters
And its not wrong in doing so. Are  actual  home buyers ( not investors)  really going to come to  exhibitions when most houses in Mumbai are way beyond the aam admi’s means.  Demand is simply not picking up and inventory of 122 million sq ft was lying idle in December last year. A study by real estate research firm Liases Foras  had shown the weighted average price of a flat in Mumbai now costs  more than Rs 1 crore. Liases Foras estimates that even if interest rates come down to 9 percent from the current  14-15 percent, the realty market needs to undergo a 33 percent price correction to go back to 2009 levels.
In such a situation, it is  obvious that mass bookings, which is what property fairs are meant for, will not occur. There is another side to it as well. Maharashtra’s changing laws, taxes, duties and very slow clearing process means Mumbai developers have very few new projects to showcase. “There is a general sense among our members that permissions are caught in a bureaucratic tangle. Such delays are leading to cost escalation,” MCHI president Paras Gundecha told Times of India.
And there is not much respite  either as a Crisil report recently mentioned that there was no room for price cuts in Mumbai properties. Crisil expects input costs to rise by 7-9 percent in 2012 and price moderations, if any, would be low and limited to  southern and Central Mumbai.
So why are property prices not coming down? As Firstpost reported earlier, the Mumbai realty market is not driven by end-consumers but by investors.  And these investors are either FIIs,  non-resident Indians or even politicians channelising their black money into the sector.
And whats worse? Even though foreignersare not directly allowed to buy land,  the foreign money entering the housing sector is used for nothing else but to buy  land.
Pankaj Kapoor, MD of Liases Fores explains: “This tells us that land has almost been treated as a derivative that is traded with. It changes hand from owner to builder to PE funds and rises in value through the process. But nothing is created. With all capital being lost, realty has become the mother of all scams.”
Moreover,  the  proposal to hike stamp duty in Maharashtra to 1,600 percent  will only validate further that black money will only gain more momentum in Mumbai’s real estate industry.
~ Source First Post Article