In many ways, calendar year 2013 has marked a period of transition for the real estate sector, taking it to a higher level on various fronts. To begin with, the Indian economy as a whole has witnessed a rather bleak growth during the year 2013. The Indian Rupee plumbed a historic low against the US Dollar, which escalated costs and reduced property transactions. Inflation reigned at rather high levels and benchmark interest rates were repeatedly raised by the RBI in order to keep inflation in check. These economic factors impacted the real estate industry in two ways. Firstly, it experienced a hike in the cost of construction materials, especially due to higher inflation in the transport sector. Secondly, with the uncertainty caused by rising interest rates and lower economic and business growth, potential customers withheld their decisions to purchase homes and commercial spaces, and even retail spaces saw less demand. All this resulted in slower sales in the sector.

In 2012, eight cities, Bangalore, the NCR, Chennai, Mumbai, Kolkata, Ahmedabad, Hyderabad and Pune, witnessed 196,846 units of new launches. However, there has been a drop of 12 % in new residential project launches in 2013 as over 2012. Total estimated unit launches across these eight major cities of India were 172,500 units.

With India’s national housing shortage estimated at 18.78 million homes, there exists a significant potential demand for affordable homes across the country. But the Luxury segment demand has fallen, due to slow economic growth, political instability, high inflation as well as higher cost due to home loan interest rates. But we do expect that the sector will bounce back in times to come, if sufficient support from for the sector from the government is forthcoming.

According to some estimates, residential real estate prices across the country fell between 1 to 5% across most of the active real estate markets of India. Throughout 2013, property prices in most key property markets remained stable at a broader level, exhibiting a rise of 10 to less than 10%, and some even saw a minor drop.


During the past year, and a little earlier as well, the government introduced modifications to existing legislation that were expected to change the face of the real estate industry for the better, boosting its growth and making it more transparent. Steps taken included:

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