Debunking bubble economies - India pt1

I haven't covered much of India by lack of knowledge about the country. But one thing I know for sure talking to many indians about life there, is that there's a massive real estate bubble that needs popping. And it looks like it's started (HT to my friend SS for sending me this report).

Well, Mumbai home prices down 20 percent from their 2010 peak. And there's only one way they can go on the longer term: down.

Bubble mentality persists as pundits are in denial of the collapse of house prices: prices will bounce back and surpass their previous peak, said one of the CEOs of a RE company...

March 21 (Bloomberg) -- Mumbai home prices have declined 20 percent from their 2010 peak as lower sales, higher land values and increased borrowing costs forced developers to reduce prices to woo buyers, according to Jones Lang LaSalle India.

Home prices, which increased 30 percent to 60 percent last year, have returned to 2008 levels, Sanjay Dutt, chief executive officer of business at the Indian unit of Chicago-based Jones Lang LaSalle Inc., said in a report today. Dutt expects prices to remain at these levels until the three-month monsoon season ends in September.
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Still, prices will bounce back in August and surpass the 2010 high, boosted by higher salaries and bonus increases, and continued job confidence in the world’s second-fastest growing major economy, Dutt said.
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