The year 2013 witnessed India caught between low growth and persistent high inflation of the last few years. This coupled with depreciating value of rupee, strict monetary regulations, RBI's revised norms to lending to real estate sector, curb on subvention scheme and disequilibrium in the political scenario led to the subdued demand of real estate in the country. There was a sharp decline in the consumer confidence in India as reflected by the Nielsen's Consumer Confidence Index. Realty sector couldn't remain untouched by this unswerving wave of pessimism.

In a striking contrast to previous years, festive season in 2013 noticed a lull across the asset classes. Regardless of the market sentiments the residential property prices illustrated skyward progress. This further led to a decline in absorption compared to the same period last year.

Cities which exhibited a sharp upsurge in the supply observed higher decline rate in the absorption. Conversely, affordable locations and a few evolving markets in and around suburbs proved trade pundits wrong. The top emerging destinations of 2013 were Sohna and Dwarka expressway in Gurgaon.

Though the year was a lackluster year for the sector, introduction of Real Estate Regulatory Bill and Land Acquisition Bill in the parliament brought in some solace.

OUTLOOK- 2014

With economy showing no signs of revival at least in Q1 of 2014, real estate will continue to show signs of weakness in line with other sectors and asset classes. Investors and end users will continue to be cautious as hurdles to growth will prevail until the first quarter. Market may look up post the general elections. Stable government, sustainable policies, conducive RBI Policy, better industrial growth & focus on industrialization, improved infrastructure and timely delivery of infrastructure will lead to positive market sentiments. A new investor will not come in unless the rupee stabilizes. Market will largely be end user driven.

Q2 looks promising not just for the sector but economy in general will benefit from the changed political scenario. Demand in the affordable housing sector will continue to drive growth. A developer riding on good reputation, decent location, right price point and transparency in delivery will be able to hitch their wagon to success.

Along with Dwarka Expressway, Sohna is also fast emerging as an attractive destination for stand-alone developments, group housing and commercial complexes. And the areas that are likely to report significant growth going forward are Rewari and Dharuhera.

The article is authored by Mr. Ravi Saund, COO, CHD Developers.