Prices don't have to either keep going up or come down if they are too high. Mumbai real estate defies simple economics. Personally I believe Real Estate not just in Mumbai but, in India generally is overpriced. There is a bubble but, it may never burst. The builders have enough financial and poliotical muscle to hold onto to current prices unless something really goes wrong with the world economy. In my opinion prices over the next 5 years would probably stay where they are or maybe within 25% of current prices which if you adjust for inflation or the opportunity cost of the funds is the same price or maybe lower. Ofcourse, if the builders get too greedy and prices keep going up the way they have been, I don't think 20-25% annual increases in prices can be sustained for too long.
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