India's deepening economic slowdown, rising cost of living and low wage revisions, and higher interest rates are forcing salaried professionals who had earlier invested in properties to put them up for sale, according to industry experts.
People who had invested in properties some 10-15 years ago are now finding it difficult to service their home loans which have become too expensive now due to the rising interest rates and falling rental yields.
According to a survey, the resale inventory has increased nearly 30 per cent over the last six months.
"Economic slowdown has hit the real estate industry. Salaried professionals who had invested in properties five-six years ago to cash in on the boom, are now looking to sell them as they are finding it difficult to cope with the high cost of living," Advitiya Sharma, co-founder and marketing head of property portal Housing.co.in, told PTI.
He said the resale market is currently dominated by young professionals and the high cash inflows that the sector gets has made it a lucrative field.
"In the current economic conditions, finding a tenant with higher rents has become more challenging as people have become cautious due to uncertain economic conditions and are thus opting for properties with similar or lower rents," said Anshul Jain, chief executive of DTZ India.
Primary buyers are willing to deal in the resale sector than new homes due to the risks involved in new projects, said Shashank Jain, executive director of PricewaterhouseCoopers.
"Such resale inventory is mainly concentrated in large metro cities. Buyers are looking at such opportunities as they get closer to possession prices and do not have to worry about risks involved in new projects. On the other hand, sellers benefit as they can get higher returns on their investment, than settling for low rental yields," Mr Jain said.
He also mentioned that this situation will, however, not attract investors.
"Such deals will attract primary buyers. But people who are looking at investing in properties at this moment, may not consider this option," he added.
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