Indian consumers are buying more houses than ever before, with an estimated 3.5 million more units now expected to be sold this year than in the last one.
The National Sample Survey Organisation said last week that a record 6.65 million units had been sold across all segments of the market in the past six months, a figure that is likely to rise as new sales are tallied.
But many of those units are likely to be luxury homes.
India’s real estate market has been in a state of flux for more than a decade as developers, politicians and builders struggle to attract buyers, amid the country’s ongoing crisis and ongoing drought.
New Delhi’s official sales figures showed an annual growth rate of 2.9% for residential construction projects in 2017.
That was down from 3.1% in 2016 and from 4.2% in 2015.
That is still up from a 6.5% growth rate in 2016, when construction activity was soaring.
But that was partly due to the fact that some developers had to abandon their ambitious plans due to water scarcity, according to industry experts.
The city is now trying to bring back a semblance of normalcy by easing restrictions and giving developers time to bring the project onto the market, said Anupam Gupta, chief executive officer of the Indian real estate arm of the consultancy KPMG.
While the number of units being sold across the country has been climbing, there is still a lot of uncertainty over what the market will look like in two years time, Gupta said.
“We expect the market to get much better in the next couple of years,” he said.
“But we are seeing the market stabilise as buyers realise the market is not that competitive right now.”
As more people are buying, more developers are building, the price of land is rising and there is a lot more uncertainty about what will happen in the future.
“He added that there is also a “huge lack of supply” in many parts of the country.
The government is planning to ease some restrictions by relaxing rules on construction permits.
But some experts say that will only drive prices higher, which could be a major problem for the country in the years to come.
More: India’s growth in 2016 was 0.7% but it was only the second time in its history that it had been in the single digits, according the IMF.
Despite a slowdown in economic activity in the year to March, growth is forecast to rise to 3.2%.
That is up from 2.7%, the IMF said.
The country is projected to record its fifth consecutive annual growth of 4.1%.