 "Loan costs pinch, force salaried class to resell properties")
Mumbai: The deepening economic slowdown,rising cost of living and low wage revisions, coupled with higher interest rares, are forcing salaried professionals whohad earlier invested in properties to put them up for sale,say industry experts.
People who had invested in properties some 10-15 years agoare now finding it difficult to service their home loans whichhave become too expensive now due to the rising interest ratesand falling rental yields.
According to a survey, resale inventory has increasednearly 30 percent over the last six months.
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“Economic slowdown has hit the real estate industry.Salaried professionals who had invested in properties five-sixyears ago to cash in on the boom, are now looking to sell themas they are finding it difficult to cope with the high cost ofliving,” said property portal Housing.co.in co-founder andmarketing head Advitiya Sharma.
He said the resale market is currently dominated by youngprofessionals and the high cash inflows that the sector gets,has made it a lucrative field.
“In the current economic conditions, finding a tenant withhigher rents has become more challenging as people have becomecautious due to uncertain economic conditions and are thusopting for properties with similar or lower rents,” DTZ Indiachief executive Anshul Jain said.
Primary buyers are willing to deal in the resale sectorthan new homes due to the risks involved in new projects, saidShashank Jain, Executive Director, PricewaterhouseCoopers.
“Such resale inventory is mainly concentrated in largemetro cities. Buyers are looking at such opportunities as theyget closer to possession prices and do not have to worry aboutrisks involved in new projects. On the other hand, sellersbenefit as they can get higher returns on their investment,than settling for low rental yields,” he said.
Jain further mentioned that this situation will, however,not attract investors.“Such deals will attract primary buyers. But people whoare looking at investing in properties at this moment, may notconsider this option,” he added.
PTI
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