new delhibangalore dentist couple sushma and vikrant mohanty had been looking to buy an apartment in delhincr for almost a year but after several rounds of unsuccessful discussions with builders and umpteen visits to property sites they decided to wait till prices came down the 2009 real estate slump had created lots of buying opportunities but prices have climbed since then to what some believe are unsustainable levels last week as home loan rates shot up after rbi hiked interest rates the couple saw their dreams come crashing down they have now dropped all plans of owning a housethis is like a double whammy now i dont know when we will be able to buy a house we are already paying heavy rent in delhi says mohantyacross the city from where they live rk arora managing director of noidabased real estate company supertech is a worried man he has seen a 1015 drop in sales in the past few months his company launched six projects in the past one year and prices have already risen 1520 he fears a further drop in demand rising interest rates have already impacted demand he said builders like arora and prospective homebuyers like the mohantys are caught in a bind rising interest rates and soaring prices are forcing more and people to put off purchasing plans affecting builders who desperately need money to pay off costly loans and start new projects the unsold stock in major cities has been going up forcing banks and equity investors to call for a price cutits not interest rates that have spoilt the party its home prices says renu sud karnad managing director of hdfc ltd one of indias biggest housing finance companies there has to be some rationalisation of pricesby at least 1015in the next few months she added unsold residential units in projects that are completed or are nearing completion within the next 612 months in mumbai and delhincr are as high as 25 and 16 respectively of the total number of units in other top cities including bangalore chennai and kolkata the numbers range between 12 and 19 consultant jones lang lasalle found in its real estate intelligence service for the first quarter of 2011 see chart on page 1 a price correction is imminent how long can developers hold back i think prices will correct by a maximum 15 says b niyogi chief general manager real estate and housing state bank of india indias largest lender real estate research firm liases foras says approximately 4719 million sq ft of residential stock onefifth the size of chandigarh is lying unsold in the countrys top six markets for real estate firms with bad memories of the 200809 slump these numbers are scary but they also illustrate what could go wrong in a highly pricesensitive industry hugely susceptible to the vagaries of consumer sentiment interest rates and commodity price changes cost pressures are building up for developers they will have to cut prices to retain volumes failing