Social. Political. Economic. Career| Seyed Ibrahim

Serious issues & ideas. Trusted Sources.

Real Estate: In Denial of Depression

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Denial, Anger, Bargaining, Depression, and Acceptance are the five stages of grief, according to psychologist Elisabeth Kübler-Ross. These emotional stages are a particularly good fit to how investors react to investment losses.

Equity investors in India have  mostly gone through the entire process:

Denial: It’s just a correction. All bull markets have corrections—this will be over in no time.

Anger: The bear cartels are rigging the markets. Why don’t the stock exchange authorities, or SEBI, do something about it? It’s a conspiracy!

Bargaining: If I just get back my investment I promise never to speculate again. Promise!

Depression: It’s no use. My money is gone forever. I’ll never get rich in stocks.

Acceptance: OK, what’s done is done. Now let’s sell the duds at whatever loss and then work on a sensible savings plan

But the real estate sector,individual investors as well as real estate companies, seems stuck at various stages short of acceptance

Denial: Realty prices haven’t fallen. It’s just that there are no transactions. Anyway, realty prices can’t fall because no new land is being made.

Anger: Home loans are too expensive—that’s the problem. Why are rates so high?

Bargaining: If the government doesn’t do anything to help the real estate sector soon, then crores of jobs could be lost. The government should buy unsold flats and distribute them to the poor.

That’s all. There’s no depression, and there’s no acceptance, at least not in public. Whether prices have fallen enough or not won’t be decided by the developers writing press releases but by buyers writing cheques. And that hasn’t quite started happening yet.

Adapted from


Written by S Ibrahim

Feb 18, 2009 at 11:44 pm

One Response

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  1. […] see my another post: Real Estate: In denial of depression/ Possibly related posts: (automatically generated)Real estate prices come crashing down. Really?May […]

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