The Akshardham temple in New Delhi was built in five years; the prayer hall was built in nine months

At the Akshardham temple on the banks of the Yamuna River, a harvest festival is about to begin. Devotees place large baskets of vegetables of every kind – shiny black aubergines, deep red tomatoes and elongated sweet potatoes – on trestle-tables. Enormous marrows are manhandled towards the alcoves that house the deities; bundles of sugar cane are tied to the door frames.

“It took only nine months to build this [part of the] temple,” says GM Swami, an American-born holy man in orange robes helping with the festivities, referring to the white marble Swaminarayan shrine decorated ornately with birds, flowers and small statues of gurus. “It’s all hand-carved.”

A project of similar ambition is under way close by. Behind the gathering worshippers in the dust-filled twilight are arc lights, swinging cranes and the fizzes of sparks from welding torches. Silhouettes of workmen appear in brightly lit illuminated room cavities in the concrete shells of 34 residential blocks.

Building contractors are racing against time to complete the Commonwealth Games Village in New Delhi by its deadline of the end of next month. These balconied, nine-storey luxury apartment towers have become one of the Indian capital’s most closely watched building projects. They will first house 8,500 athletes and officials next October before their private owners occupy what is marketed by estate agents as premium “global living” space in India’s capital.

Work continues on the Commonwealth Games Village 2010, which has views of the temple

Amid heaps of rubble, workers’ tents and stacks of pipes, signs pointing to nearby training grounds clearly declare the suburb’s immediate purpose as part of Delhi’s 2010 prestige sporting event.

In March 2011 the apartments will become private residences. Already buyers have been lured with grandiose mantras such as “Homes to inspire the next generation of winners” or “A historic address for those shaping India’s future”.

Angelie Monga, a sales executive at Emaar-MGF Land, the real estate company developing the village, says the apartments appeal to non-resident Indians looking for a pied-à-terre in the capital. She says four-fifths of the homes have already sold off-plan, leaving 100 remaining for sale.

“These are high-end flats, near Delhi’s centre,” she says. “There’s more open space on the banks of the Yamuna and nothing can come up beside the village [to crowd it out].”

One draw of the Commonwealth Village is the location, in fast-growing east Delhi, in easy travelling distance to the retail hub of Connaught Place and Delhi’s historical sites, such as Humayun’s Tomb and the Red Fort. It is also close to the Noida business district, which includes Film City, Amity University and mushrooming office parks of IT outsourcing companies.

A second is the gated-community concept. Many of India’s older suburbs are loosely gated. The Commonwealth Village takes that a step further by offering a self-contained community complete with recreation, study and shopping facilities. Shared features include a 30-metre swimming pool, a gym, a library and a reading room. The village also has a clubhouse and a putting green, a tennis court and a children’s area.

A third is “green appeal”. Although the current site is a dustbowl just far enough away not to catch the stench of the polluted Yamuna and a congested national highway, the developers boast that 70 per cent of the 27-acre site will be open garden landscapes and that the buildings will themselves be “green”. The entire complex will also have a fail-safe supply of electricity in a city where power-cuts are frequent.

Apartment prices vary depending on the view. The show rooms have a distinctly western feel, with marbled bathrooms, fitted kitchens and air-conditioning throughout. For a two-bedroom, three-toilet apartment of 1,443 sq feet the buyer pays Rs19.1m ($408,000). At the larger end of the range, a five-bedroom apartment with seven toilets, at 3,278 sq feet is sold for Rs49.2m. The apartments also come with a servant’s room to suit lifestyles where home help is the norm.

Comparable developments in Delhi include India Bulls-Castlewood at Okhla, Parsvnath-Paramount at Subash Nagar and Parsvnath-La Tropicana in Civil Lines.

A show apartment at the complex

The contract to build the village was won by Emaar-MGF Land two years ago in a bid launched by the Delhi Development Authority. Emaar Properties, a Dubai-based group with operations in 16 countries, is finding comfort in Delhi and other fast-growing cities in India, where supply for high-end property lags behind demand. Back on home turf in Dubai, the global financial crisis has led to an oversupply of housing and sharply falling prices. Not so in India. Property prices in India’s metropolises have remained stubbornly high. Duvvuri Subbarao, governor of the Reserve Bank of India, last month aired concerns about an asset price bubble, warning that property prices had not fallen far enough.

Since teaming up almost five years ago, Emaar and its local partner, MGF Development, have created a growing portfolio and have ambitious plans to build India’s biggest shopping mall and to launch hotels under the Marriott International brand. They have developed residential communities in Chandigarh, the Le Corbusier-designed city north of Delhi; in Chennai in the south and in Gurgaon, a modern satellite business city to India’s capital. New developments, heavily accented on exclusivity and recreational activities such as golf, are also planned for Jaipur and Hyderabad.

Delhi is a city undergoing a big transformation. To modernise the capital of one of the world’s fastest-growing large economies, the government is upgrading outdated infrastructure with a new airport, new flyovers and a metro system to relieve the heavy congestion.

The city is famous for architectural prowess through the ages, with an abundance of Mughal-era buildings and British colonial styles. But high-end residential property is in short supply and as expensive as in any capital city in the world. There are the prized bungalows of leafy Edwin Lutyens Delhi from the early 20th century or villas in Golf Links, Chanakyapuri and Vasant Vihar. Apartments are also popular in the more densely built areas of Defence Colony, the South Extension, Jor Bagh and Hauz Khas. Those seeking more space, less pollution but who are willing to spend more time in the car commuting, opt for farmhouses at Chatturpur or close to the airport near Gurgaon.

The anticipated exterior of the Commonwealth Village

The Commonwealth Village reflects a new type of well-ordered accommodation that will grow in popularity. Yet it has its critics. Some well-to-do Delhiites express dismay that the city has not taken a similar route to London and Manchester, which used large sporting events to regenerate dilapidated or under-developed areas. Some argue that an athletes’ village should have been designed as low-cost housing or urban renewal rather than a greenfield real estate opportunity for the country’s rich.

Others, including the Commonwealth Games Federation, voice doubts as to whether the village and other facilities will be ready on time. The swami at the Swaminarayan temple, however, is optimistic. He’s seen a business plan or two during a career in which he once worked at McKinsey, the management consultants. “It’ll get done,” he says, to the echoing of night-shift hammers and drills. The one thing India a country of 1.2bn people can always do is throw labour at a large construction project.

Emaar-MGF Land, tel: +91 011-2270 1001, www.emaarmgf.com

James Lamont is the FT’s south Asia bureau chief