Property prices - Hitting the roof?

I feel there is a lot of cribbing going on against property prices and builders. My take on this is

1. Like any other market, even real estate markets exhibit the laws of demand and supply at work. Property prices are hiked either because there is more demand than supply, or because there is less supply for the existing demand. The fact that property prices have increased means that there are ample buyers for a property. (Unless we follow the premise that buyers are not rational, and foolishly pay a lot more money to buy properties at inflated prices). This brings me to the 2nd point.

2. The reason that buyers are willing to buy properties even at higher prices is the same as the reason that Indian stock markets have been consistently increasing in this past decade - Liquidity. For stock markets, liquidity is provided by FIIs from countries where domestic returns are lower. Similarly, for the real estate markets, liquidity is provided by the ever increasing middle class, whose pockets are bursting with fatter paychecks and increasing disposable incomes.

If it were not for the liquidity provided by foreigners, our sensex would still be languishing at sub-10000 levels. Have we ever moaned about stock market valuations not having a fair price in the past decade? Have we ever complained against the excessively high valuations commanded by a majority of the stocks out there? Have we ever cribbed that we are not able to buy Infosys at its 2002 price?

So, I feel that it is very ignorant and unfair to blame just builders for increasing rates. Who determines the fair price? Who determines the profit margins that builders should earn? Price determination is best left to markets. The country has enough armchair cricketeers. We do not need more armchair experts.
Its time we faced the reality that property prices are never going to go back to their 2002, or even to their 2005 levels. If property prices do collapse, it wont happen in isolation. There will probably be a financial disaster leading to a collapse across all asset prices including stocks, commodities and even in wages. Now, nobody is going to go around buying real estate when their jobs or businesses face uncertainity, will they?