Properties For Resale Increase By 30%
The number of properties coming for resale in various important metros has increased by 30% according to real estate agents. Most of the properties on resale belong to young and salaried working professionals. The reason for increase in resale can be attributed to the bad economic situation in the country.
Reasons for increase in property resale
A majority of the homes coming for resale are bought on bank loans. The falling rupee has increased the EMI on the loans. To add to the woes, employers have either postponed pay hikes or offered marginal hikes. The pay hikes are not sufficient to pay off the increasing loan interests. This is the chief reason for which most working professionals are opting for reselling their properties.
People who have bought their properties recently are not the only ones affected. Those who purchased properties ten years ago and let it out for rents in the city limits are finding it hard to cover the growing EMIs with the existing rents. Power tariff has increased and commuting to work has become difficult. There are also several SEZs and townships springing up on the outskirts of cities such as Bangalore, Hyderabad and Chennai. Most professionals are moving there due to lower rentals. The rentals for properties within city limits have not seen growth due to these reasons.
There is also another problem these property owners are facing. People who invested in these properties during the boom times are finding it hard to offload their properties. This is because the banks are not keen of financing purchase of second hand properties. Hence, it is hard to find people who are keen to invest in a resale property.
Prospective buyers
While the resale properties are not very attractive for buyers who are looking at real estate investments, there are still buyers for the properties on resale. Most of these customers are end users. There is no waiting period and no half-baked promises from developers for resale properties. The property owners can pay off their loans and do not have a head ache of finding tenants.
Effects on real estate
Reports from Jones Lang LaSalle state that several properties in Mumbai are unsold for about 48 months followed by 23 months in Delhi and 25 months in Bangalore. The prices of projects which will be developed within the cities may drop by about 15% while there may be an increase in prices by 25% outside city limits.
