Home prices may decline in the next three months, according to a national poll conducted among top property brokers by Edelweiss Securities, a Mumbai-based brokerage.

Almost 70 per cent of the brokers who participated in the poll believe prices will be flat or negative in the period and even Diwali is unlikely to lift the mood in the property market.

About 60 per cent of them believe that prices have stagnated over the past three months.

The Reserve Bank of India's [Get Quote] move to raise repo rates by 125 basis points in the last six months has resulted in commercial banks increasing their lending rates by similar margins. In turn, home buyers have to pay a much bigger amount as monthly pay-out on home loans.

On an average, the monthly instalment on a 20-year, Rs 10-lakh loan has gone up over 50 per cent to Rs 12,740 on a 14.25 per cent rate from Rs 8,060 (7.5 per cent interest rate) five years ago.

Due to high demand from end-users and investors alike, home prices in main markets such as Mumbai and Delhi have trebled in the last two years, making homes unaffordable for middle class buyers.

According to the poll, 90 per cent of brokers have seen a drop in transactions in the last one month and almost 80 per cent of them witnessed a reduction in enquiries over the same period.

But, property brokers feel that price movements will differ in different markets. According to the poll, about 60 per cent of brokers expect prices in the Mumbai island city to come down in the next one year.

But they feel prices in Gurgaon in the NCR region, Whitefield in Bangalore have stagnated over the past three months against the perception of a price fall.

Meanwhile, brokers say they have seen an increase in enquiries in Chennai in the last one month. However, they are yet to see the conversion of enquiries into transactions.

Says Pranay Vakil, chairman of Knight Frank, an international property firm, "If you compare residential sales this year compared with last year, there has been a drop of 90 per cent. It is just a tip of the iceberg. Worse is yet to come,'' he says.

Adds Hemant Barabde, a Mumbai-based property consultant, "We feel the current slump to continue for a year till the general elections, after that prices may pick up again.''