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The decline in gold prices, resulting from market expectations that Cyprus would sell its gold reserve to save itself from financial crisis and that US quantitative easing would come to an end soon, is an opportunity for buyers to shift from real estate investments to bullion. When markets are volatile, investors tend to increase their portfolio holdings of gold and real estate.

However, off late, investor concerns over gold as a safe investment have raised similar apprehensions about property as prices have become astronomically high and the two are more often than not substitute for making money when the economy is in doldrums. Second, the plunge in the gold prices is also linked to speculative futures trading in the yellow metal.

The same holds true for property too, since nothing but investor play can explain the price properties in Mumbai and Delhi command. Hence the reasons that lead to an unwinding of gold prices could impact housing prices too. A recent report by Karvy Stock Broking, using real estate rates and international gold price data for Hong Kong, has shown that there was a 0.81 (81%) correlation between the prices of both asset classes. The same hypothesis holds true for India in 2012-2013, the research has shown.