Industry sources, in fact, say that across all metros and tier II cities such as Mohali, Kundli (Sonepat), Jaipur, Lucknow, Indore, Surat and Cochin, there has been a 70% to 80% drop in the number of deals. Arvind Mahajan, executive director of KPMG India, feels that the recent steps by government to boost real estate sector will take time to trickle down.

"With banks cautious towards lending to smaller developers, consolidation should take place soon. Wealth perception is a big issue in the market right now, especially in the backdrop of these companies' valuation going down drastically on the stock market. There is demand up to a point. In misplaced euphoria, these realty players created more supply than demand in some places, which has backfired on them. The mix of housing holds the key. For developers, who have priced properties between Rs 25 lakh and Rs 1 crore, the going has been tough," he says.

In fact, realising that the industry is facing a cash crunch, many developers are planning to do tie-ups at a project level, or even give huge discounts on commercial properties which then can sell as hot cakes. Many in the industry feel that a lot of projects already announced may not actually take off.

With significant pressure on realty companies, they are likely to go for restructuring and focus on selective projects in the short to medium term. There will be more tie-ups at the project level. For developers, these will be testing times that will check whether they are strong enough to weather the downturn.