If India needed any more evidence that it was in the midst of a massive housing boom, it got it in this week’s GDP figures, raising hopes that the industry will continue to power the economy for years to come. The construction sector expanded 13.3% year on year in July-September, up from 7.9% in the previous quarter and its strongest performance in five quarters.
This enabled India to grow at a faster-than-expected 7.6%, making it one of the world’s fastest-growing major economies. In contrast, high interest rates and oil prices have pressured Western economies, while China has been hampered by a debt crisis in its property sector.
The long-awaited boom, which has produced millions of employment, follows a six-year period of debt and pandemic-induced slump until the construction sector began to improve last year and gained its stride this year. Rising salaries for many Indians, a severe housing shortage in major cities, and rapid population expansion have all contributed to this trend.
According to government projections, the world’s most populated nation had a 19 million-unit urban housing deficit last year, which is predicted to treble by 2030. The substantial rise in construction has greatly contributed to economic growth and is expected to continue in the coming quarters.
Home prices in India are predicted to rise faster than consumer inflation next year, with better earners picking up newly built luxury properties in cities driving development. By offering subsidies, the government is also attempting to increase the availability of affordable housing in India’s smaller towns and cities.