According to analysts, the crisis, which comes at a time when the property market is facing a slump, could lead to major price correction in the next one-year. Prices in select markets are already down by more than 20 per cent and you should expect more.

The builders may find the going difficult and offer discounts as the slump is expected to continue for the next 18 to 24 months. Hopes of builders that Diwali would reverse the trend seem unlikely. How much would prices drop? "It's difficult to put a figure. But demand has come down drastically which is worrisome. It is not even 10 per cent of last year," said Pranay Vakil, Chairman, Knight Frank India, a global realty consultancy.

"The $14 billion FDI that was to come into Indian realty will not come now due to the financial problem back home in the US. Projects will be in problem and we will have a difficult year ahead. There will be lot of mergers, acquisitions and closures (of real estate firms)," Vakil added.

Will prices drop by 40 per cent in one year? "It is difficult to predict the fall. Developers are getting impacted," said Pankaj Jaju, senior VP (real estate), Enam, an investment bank.

Reputed developer Niranjan Hiranandani, MD, Hiranandani Construction and chairman Hirco, has a different take. "I see little softening of prices till April, 2009. But next Diwali prices would hit the roof. We will see the turnaround from May. Lehman is a temporary problem. Others will fill the vacuum. I don't think we are into big time trouble." Hiranandani said.

However, Gagan Banga, CEO, Indiabulls Financial Services believes that the liquidity problem would impact the realty sector in the short to medium term. "Fund supply will be in a problem and they (Lehman and others) will pull back all the investment planned," Banga said.

Orbit Corporation CFO Ram Yadav said that developers would now look at Indian institutions to get debt funding to complete projects.