Home prices are likely to fall another 10 per cent in the second half of2009, as demand remains subdued, says a research report from Crisil Research.

Faridabad in the NCR, Zirakpur and Derabassi in Mohali, High-Tech city inHyderabad and Rajiv Gandhi Salai in Chennai may see a further drop due tooversupply of residential properties, the report says.

According to Crisil, home prices had fallen by 18 to 20 per cent in March 2009from the highs seen in the first half of 2008, due to global slowdown, fears ofjob security and slowing growth in the domestic economy, the report said.

But property developers contested Crisil’s opinion, saying prices have alreadybottomed out. “We do not agree that prices will come down further. It becomestotally unviable to cut prices in the ongoing projects,’’ said Ravi Ramu,director, Puravankara Projects, a Bangalore-based developer.

Adds a Unitech spokesperson from Delhi: “Prices have bottomed out in most ofthe markets. We do not see prices going down further. We are getting enormousresponse in our recently launched projects, hence there is no need for furthercuts,’’ the spokesperson said.

Home prices had more than doubled in many cities such as Mumbai, Delhi andothers in the past four years upto the first half of 2008, as incomes rosesharply, investors’ base expanded and credit flowed easily in property. But asgrowth slowed, demand for homes collapsed.

However, home prices are expected to stabilise in the first half of 2010 and goup marginally in the second half of the year, backed by lower home loaninterest rates and better job security due to improvement in global anddomestic economy, Crisil said.

“But prices will not increase the way they shot up in 2006 and 2007. Investorswill not come back to the market unless they see prices going up in a sustainedmanner,’’ said Sudhir Nair, head of Crisil Research, in a teleconference today.