Acknowledgements i Abstract iii List of tables viii 1. Introduction 1 1.1. Background 1 1.1.1. Defining bubble in housing markets 1 1.1.2. Housing Market in global Context: 2 1.1.3. Problem of Discussion: 3 1.2. Need For Study: 3 1.3. Aim: 3 1.4. Reserch objectives: 4 1.5. Reserch Questions: 4 1.6. Scope 4 1.7. Limitations 4 1.8. Methodology for study: 4 1.9. Frame work of Analysis: 6 2. Overview of Real estate Market 7 2.1. Real Estate market in India: 7 2.2. Conceptual Understanding of Real Estate Cycles and its Impact: 7 Phase 1: Recovery 8 Phase 2: Expansion 9 Phase 3: Oversupply 10 Phase 4: Recession 10 2.3. Factors Influencing Property prices 11 2.3.1. Construction costs 11 2.3.2. Income 12 2.3.3. Interest rate 12 2.3.4. Population growth 12 2.3.5. Land prices: 13 2.3.6. Supply of housing 13 2.4. Bubble Indicators 13 2.4.1. Price-to-income 14 2.4.2. Housing Price to rent ratio: 14 2.5. Behavioral finance – Human behaviour’s effect on housing markets 15 2.5.1. Market inefficiency and word-of-mouth 15 2.5.2. Irrational price expectations 16 2.5.3. Over-confidence 17 2.5.4. Herd behaviour 17 2.5.5. Consequences of the human behavior on housing markets 18 3. Methods 20 3.1. Research philosophy and approach 20 3.2. Quantitative and qualitative methods 21 3.3. Question 1 – Market variables 21 3.4. Question 2 - Indicators 22 3.5. Question 3 – The housing buyers’ behavior 22 3.5.1. The survey 23 4. Ahmedabad City 24 4.1. Introduction 24 4.2. Part I. Economic variables 25 4.2.1. Construction cost: 25 4.2.2. Income: 25 4.2.3. Interest rate: 26 4.2.4. Ahmedabad’s population 27 4.3. Part II. Bubble indicators 28 4.3.1. Housing Price to income Ratio: 28 4.3.2. Housing Price to rent ratio 28 4.4. Part III. The housing buyers’ behavior 29 4.4.1. Developer’s Analysis: 29 4.4.2. Consumer’s survey analysis: 33 4.5. Real estate cycle and bubble: 42 5. Conclusion 3 References 5 Annexures 7