Despite the slowdown in the global economy, the demand for residential property in India is expected to remain strong, according to property consultants based in India. However, it is unlikely that property prices will rise at the same speed as they have in recent years.

Despite slowing, the Indian economy is still expected to grow by around 7.5% this year, making it one of the most attractive investment destinations, along with China.

According to CB Richard Ellis, domestic demand is still the main driver in the Indian real estate market though.

Anuj Puri, chairman and country head at Jones Lang LaSalle India, says that the middle-income residential property sector is most attractive right now for long-term property investors. However, he advises investors not to buy off-plan property that is in the early stages of completion because they are expected to be plagued by delays, and the safest bet is projects that are, or are about to be, completed.

PropEquity, an online data and analytics search platform covering the Indian real estate industry, also reported in a recent study: ‘Taking into account the price increase of the four key construction components - steel, cement, labour and bricks - there has been an 18% gross rise in construction cost over the last 2 years (since 2009). This escalation will corrode the profit margins significantly and make delays in project execution inevitable.’