MUMBAI: After a long lull, the year 2013 is expected to bring back hopes of growth to the real estate sector, mainly due to the government's positive approach towards reforms and moderation of interest rates, experts say.

Land Acquisition and Real Estate Regulation Bills are expected to be passed during the year, while there is a likelihood of Reserve Bank bringing down the interest rates.After a long lull, the year 2013 is expected to bring back hopes of growth to the real estate sector, mainly due to the government's positive approach towards reforms and moderation of interest rates, experts say.

Land Acquisition and Real Estate Regulation Bills are expected to be passed during the year, while there is a likelihood of Reserve Bank bringing down the interest rates.

"The passage of FDI in multi-brand retail by the government shows its seriousness on introducing reforms. RBI can be expected to lower interest rates in the coming months which will benefit developers as well as consumers. This will boost the sentiments," Knight Frank India chairman Pranab Datta said.

Residential prices, which have been increasing over the past few years are likely to witness subdued growth in most markets in a short to medium term till the pressures of unsold inventory are eased out, CBRE chairman and managing director Anshuman Magazine said.

Finance Minister P Chidambaram had recently asked the developers to sell their unsold inventory at a lower price.

"Besides, infrastructure initiatives such as Greater Noida metro rail network and proposed metro link in north-west Bangalore are likely to have a positive impact on the residential market of these cities," Magazine said.

FDI in multi-brand retail will also boost the demand for commercial real estate.

"Apart from the international brands, several domestic brands are also exploring opportunities to increase their foot prints across the country. This anticipated growth in demand is expected to bring some upward movement in retail rentals, particularly along established hubs," DTZ-India chief executive officer Anshul Jain said.

According to Jones Lang LaSalle, major cities like Mumbai, NCR-Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata will see the addition of close to 9.5 million sqft of mall space in 2013.

"The primary reason is that a sizable amount of supply that was expected to reach completion in 2012 has been being pushed to 2013," JLL Chairman and Country Head Anuj Puri said.

While Mumbai, NCR-Delhi, Bangalore and Chennai will together contribute 70 per cent of the total retail space absorption, cities like Pune, Hyderabad and Kolkata will account for the remaining 30 per cent.

Further, the ongoing policy reforms are expected to provide some cushion to corporates who are likely to execute their expansion plans in near future.

"Demand for office space is expected to be broad-based and not restricted to IT-ITeS and banking sectors. However, even as leasing activity performs relatively well, rentals are expected to remain stable owing to large upcoming supply and high vacancy levels across most cities," Jain said.

According to JLL, cities including Mumbai, Bangalore, Delhi NCR, Chennai, Hyderabad and Pune will witness commercial corporate property transactions focused on their own occupancy needs.

"We expect 2013 to bring a larger-than-usual number of NRI investors into the commercial space arena. This is because NRIs are currently enthused by the prevailing exchange rate benefits and the fact that commercial real estate capital values are still 15-25 percent under their 2007-08 peak levels," Puri said.