Property prices have dropped 10-15% in the past six months and are likely to correct further, according to a FICCI-Ernst & Young report on real estate. The report also says developers are not too keen on acquiring land from the government as a government auction leads to an unjustified escalation of prices.

"We have seen 10-15% correction in property prices in the past 6-8 months mainly because they had gone up too high. The extent of correction though is city and product-specific," says Ansal Properties and Infrastructure chairman and Ficci real estate committee chairman Sushil Ansal.

He says land prices too have fallen 10-15% and the brunt of it is being borne by developers. "Farmers are not reducing their prices. They are just holding on resulting in developers' margins getting squeezed," Mr Ansal said.

According to the report, 62% of developers foresee Indian real estate embarking upon a high growth trajectory in the long term despite the slowdown witnessed over the past 12 months.

Rising interest rate is a major concern for developers, who feel any further rate hike would have a damaging impact on housing sector. The non-availability of quality manpower is another major concern for most developers.

The report also calls for the setting up of a regulator for real estate. "We are an overregulated industry. There is too much of bureaucracy for us to handle. That's why there is a need for a body, which can facilitate a single-window clearance for developers," Mr Ansal said.