But for buyers the big news this year is that of a de facto regulator emerging for the sector. The Competition Commission of India is understood to be investigating about 70 developers across the country for abuse of dominance.

The Commission has already modified the buyer-seller agreement for DLF in two projects in Gurgaon. And this order is a follow through of its order in August last year imposing a stiff penalty on the real estate company.

These are the news that could reverse the slowdown in housing credit in last calendar year. From January 2012 through to the end of the year, housing credit from banks has risen only 8.6 per cent. The positive element is that is marginally better than 2011. The ever increasing cost of inputs, inflation and a weak job market has dampened the demand for houses.

Post the CCI order it will be interesting to see if prices of property correct.

Ongoing Initiatives

There have been a few infrastructural and financial initiatives started by the government last year, which will begin to show positive impact and act as catalysts for new projects in 2013.

“Greater Noida metro rail network, and the proposed metro link in north-west Bangalore as well as on-going metro rail, Outer Ring Road, Extension of MRTS etc. projects in Chennai are expected to have a positive impact on the residential real estate sector of these cities,” says Anshuman Magazine, CMD, CBRE South Asia, a real estate consultancy.

The government seems to be serious about launching National Investment Board which will enhance infrastructure spending. The Parliament has recently approved FDI in multi-brand retail which will boost the retail realty segment initially and benefit developers as well as consumers.

“The decision by the RBI to allow entities such as the National Housing Bank (NHB) and housing finance companies (HFCs) to be included as eligible borrowers for financing low cost housing projects is a welcome move. Widening External Commercial Borrowings (ECB) limit is considered attractive, as its cost of capital is lower than that of domestic borrowings. It could be a preferred source of finance for developers and could help address some of the liquidity constraints prevailing in the sector and give a much needed boost for affordable housing,” says Sachin Sandhir, managing director, RICS South Asia.

Will RBI relent?

Real estate players say that the stringent lending norms to the sector have curtailed capital flows. The alternative sources of financing available at present are also unable to provide much needed respite to developers. The impact of a few initiatives would take a while to improve the market. Given, in the current liquidity crisis, there is an expectation that the RBI would go the extra mile.

“The rate of interest holds the key to the sale of flats. We sincerely hope that the RBI will come out with the monetary policy to allow banks to make the rates reasonable in 2013. Relaxation in the monetary policy will play a crucial role in leveraging the liquidity in the market for the developers as well as the consumers,” says Paras Gundecha, president, Maharashtra Chamber of Housing Industry (MCHI-CREDAI). The RBI has already given a cue that rates cuts are likely in the near future.

Expectations from the Government

The Competition Commission of India (CCI) on January 3, modified the apartment buyers’ agreement between real estate major DLF and apartment buyers in its two projects, wherein the realty major was found to have abused its dominant position.

The commission amended the apartment buyers’ agreement to remove the abusive and unfair conditions present in the original one-sided agreement.

Among the several modifications, the commission has said that payments schedule to be linked with construction milestones and not time. The other key modification is that the agreement should be equitable in dealing with defaults by both builder and buyer and penalties should be the same for both parties.

This should bring buyers much-needed cheer, if this order becomes the basis for a model builder-buyer agreement that would take shape when a regulator for the sector comes into being.

The developers would also expect the government to be realistic and implement policies to encourage home buyers. They wish that in the coming years the governments — Centre, state and local — should move in tandem and in order to give a boost to the sector.

“The grant of infrastructure status to the sector, instituting a regulatory body and a transparent policy pertaining to the issue of land acquisition are some of the most important expectations from the developers,” says Neeraj Gulati, MD, Assotech Realty.

“The government’s habitat policy is to eliminate housing shortage by 2012 will further be pushed to 2013. A strong urge for developing integrated housing and raising the FSI ceiling would be a welcome measure one could expect from in 2013.”

However, Lalit Kumar Jain, national president, CREDAI has a ready to-do list for the government.

Strengthening of the demand and supply side by a special housing development policy.

Acceleration in affordable housing construction through various measures in the forthcoming Budget.

Single window clearances for projects.

Land Acquisition Bill to be development-friendly

Real estate Regulatory Bill to be reworked to avoid corruption.

Effective and simplified development rules and policies to increase supply,

Make infrastructure feasible and save green and agriculture lands

Boost prudent urban infrastructure through private public participation.

“There is a very small window available for governments to act and whatever has to happen has to happen in the coming 3-4 months,” says Jain.

Agenda for developers

The developers have tried all the tricks in the book to attract buyers and push sales but that did not yield the desired results. They give mainly two reasons: astronomical property prices and high rate of interest for home loans. They held government policies and processes responsible for high property prices and RBI responsible for high rate of interest. Experts feel that even developers too could do their bit to ease the situation.

Anuj Puri, chairman and country head, Jones Lang LaSalle India forsees a drastic trimming of frills and the focus of marketing shifting to pricing and innovative payment schemes.

“Developers do need to re-calibrate their bottom lines while still remaining viable as businesses. It is extremely doubtful that freebies and other such incentives will prove to be much of a booster in the current environment. The only way to catalyse healthier sales at this point is offering buyers the tangible financial relief such as pre-launch benefits in the price etc,” says Puri.

One can expect that the economy would revive and environment for real estate would improve in 2013. If at least some of the expectations are fulfilled, it will provide much a needed impetus for the sector. The overall growth and property prices will largely depend on it and so the dreams of home buyers.