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It has been noted that the year 2013 ended on not so positive note as the year saw the job losses rising, economy slowing down and salary increments trimmed to the bare minimum. What seemed to take a toll on affordability were high interest rates on home loans and property prices.

It has been observed that during the year, all those reasons led to a lesser demand for housing. However, the situation was not grim for the buyers as they were pampered with high bargaining power given the fact that the builders considered wooing them with freebies and price discounts. In 15 of the 20 cities, the index rose 1.92-27.06 percent year on-year (y-o-y) in the September quarter according to the National Housing Bank’s Residex.

It was also observed that in 12 of those cities, it saw less than 10 percent increase. One the other hand, the index came down by 5.56-10.71 percent, in five cities. In India’s top 12 markets, builders could increase prices by 4-19 percent according to the primary market data from PropEquity, which is a Gurgaon-based real estate firm. What is submissive and evident from these numbers is that the builders on their prices were ready to offer discounts in the range of 10-15 percent. Moreover, in the secondary markets, much lower discounts were available.

The year also saw to it that the prices of ready-to-occupy properties rose. This was even as developers were under pressure to offer discounts on their new launches. Primarily, there were two reasons for this trend. Developers faced a cash deficit first as the realty sector slowed down. It was also seen that the buyers who had an inkling about this situation, insisted on discounts. Secondly, the cash crisis was seen to affect the speed of construction. Besides, what was seen as being extensive was the project delays. Buyers chose to pay a premium for ready-to-occupy properties in order to alleviate the risk of delays in delivery. Moreover, what was seen in the second half of 2013 was that builders made to buyers an offer of scores of smart discounts and schemes. However, the buyers did not provide a great response to these discounts.

Strategy for 2014
It is slated that the year 2014 might see prices correction only in some segments and locations. However, resurgence in the real estate market will be dependent on the overall economic situation. It is also believed that when it came to elections, if they threw up a more pro-business government, then the consumer confidence and economy stood some chances of improvisations. Moreover, if inflation was curbed, in the second half of 2014 the central bank could cut rates. And what else might give a fillip to the real estate sector was that home loan rates might follow suit.

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