“Some cancellations have already begun. After the stock market fell, a private developer reported five cancellations on NIBM road from clients who had lost money in the market,” said Ravi Varma, president of the Estate agents association of Pune (EAAP).

“Typically, profits booked in the markets are invested in real estate. However, builders are least likely to own up to cancellations, as it will further affect their stocks, if they are listed. Developers think that they can talk up the market,” he said. Varma added, however, that cancellations due to stock crash are very small and not likely to exceed two to three per cent of the real estate market.

Last week’s crash from around 22,000 points to around 18, 000 on Friday was responsible for wiping out nearly Rs 2 lakh crore, Rs 1.5 lakh crore of which was lost on the first day.

Deepak Kunjeer was one real estate consultant who admitted that the land market was headed towards a slump. “In the past two to three months, the sales have come down by half. This is especially true of areas like Kharadi, Wagholi, Kondhwa and Hadapsar. The same plots have been on sale for the last few months. Properties have not been moving or changing hands,” he said.

Kunjeer said the pre-budget months were normally slow and coupled with a global slowdown in the offing, a cascading effect is likely in six months’ time. “There is a 99 per cent chance of a correction happening unless there is something miraculous in store in the budget with major policy decisions in infrastructure and power sectors or in the case of allowing FDI funds,” he said.

However, most city developers dismissed the notion of mass real estate cancellations due to the stock market drop saying that they dealt only with “genuine buyers” and did not deal with the speculator community.

Some others said it was too early to say if the stock market effect would spiral down to real estate stagnation. “The effect, if any, will take at least three months to be visible in the market. Even if investors have lost money, their first reaction is rarely to cancel their real estate purchase,” said Manish Jain, Kumar Properties.

This trend is likely only in the high-end segment and not the middle class, or the working class who do not have a “risk taking appetite”. Irrespective of the sensex, the last three months have been slow and real estate consultants agree that prices have been on the upswing without any perceived value addition. This coupled with the pre-budget jitters and the law of averages makes a slump inevitable, they said.

The last real estate stagnation took place in 1996, which lasted for almost five years. In the ensuing boom, the last three years has seen real estate prices more than triple. The complementing growth in the economy, especially the IT players and now recently the manufacturing sector, encouraged developers to cater more to the high end segment.

“But now developers are resorting to raising prices arbitrarily. In the last two months, projects across the city have seen prices rise by Rs 500 per sq ft for no reason. Effectively, this puts a lot of property out of reach for the middle class segment,” said Mukesh Charbhe, real estate agent working in NIBM are Sopan Baug areas.