Interestingly, a lot of developers shifted their product portfolio from luxury housing to affordable segment when economic downturn slowed down demand.

Mr Gupta of JLLM feels that unlike its counterparts, the residential sector has begun to show signs of stability in many markets, and even recovery in certain cities. "Whether this trend will continue depends on economic factors (mortgage rates, GDP growth, labour market stability) and on prudent decisions by developers on issues relating to prices and quality of product being offered," he says.

Industry experts say that upcoming growth corridors with good infrastructure facilities and connectivity to important pockets of the city hold a lot of potential.

Venu Gopal, associate director-real estate practice, Ernst & Young, highlights locations that hold promise. "In the NCR, Gurgaon provides a wide range of options from premium housing to mid-income residential projects as far as pricing and connectivity is concerned. Northern Bangalore holds good potential, primarily due to the airport at Devanahalli and the surrounding infrastructure development like Bellary Road widening, express highway and proposed high speed monorail. In Chennai, the southern and western peripherals of the city are witnessing significant residential developments. As for Hyderabad, Madhapur and other areas surrounding the Hitech city hold good potential."

However, a few important factors have to be kept in mind before investing in a particular city. Factors such as current and expected infrastructural development, linkages on major connectivity corridors, the client profile in the area and the presence of major developers in the area in both residential and commercial space will all make a key difference for an investment decision in a city, according to Harinder Dhillon, V-P, marketing, Raheja Developers. The developer's residential projects are coming up in Dharuhera and Gurgaon.