With the economy witnessing a downturn and interest rates and inflation reaching all-time highs, 2013 has been one of the most eventful years for real estate in India. While the introduction of the Real Estate Regulatory Bill and Land Acquisitions Bill in the Parliament was a positive for the realty industry, end-users sitting on the fence expecting a fall in prices led to a contraction of demand in the last few quarters. The market turned from sellers to buyers, with attractive offers from various developers across the range of projects.

Less activation Mumbai, Kolkatta and other key markets saw less activation from real estate players as delays in approval impacted project launches.

As the recessionary market ends, we need to concentrate on execution, as that will help in building credibility and that's the opportunity the branded players can build up.

With the Indian economy getting back on track, the real estate sector is expected to stabilise in the next two to three quarters. We would anticipate this sector to grow, albeit at a slightly lower pace, as the demand for housing still appears to exceed supply, and the weakening rupee makes India an attractive real estate investment destination for non-resident Indians.

We expect the market to start an upward momentum by the end of 2014 and suggest buyers and investors utilise this opportunity to book their dream homes, as these offers would vanish once the economy starts showing signs of recovery.

Price stability Stability in property prices during 2013 is set to give the required confidence to consumers who have been delaying their decision to buy. We believe that the affordable housing segment is likely to see the highest growth, but other segments will also grow as people aspire for better homes, better quality of life and hence invest more in buying their homes.

On the other hand, the demand for luxury housing in India will continue to grow due to the influx of global lifestyle trends along with changing lifestyle and aspirations seen amongst young India. The demand has been increasing in cities such as Bangalore, Delhi, Chennai, Kolkata and Mumbai. Liberalisation of government policies is among the key reasons for the growth seen in the real estate industry in India. Furthermore, FDI in multi-brand retail will also give a push to the sector. It will trigger the opportunities for retailers, thus leading to an increase in demand for real estate.

Ancillary and service industries such as IT/ITes and manufacturing industries that are being set up in tier 2 and 3 cities also play an important role. Going forward, the key to real estate growth would be to get infrastructure status with relevant subsidy for affordable housing, subsidy on technology enhancement so that there is less dependence on manual labour, curbs on raw material costs as that will impact the quality and timeline. Finally, the interest rate needs to be reduced so as to make it attractive enough for buyers.

The writer is the MD and CEO of Tata Housing.

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