Salaried real estate investors in Patna in mess as loan cost pinches

The deepening economic slowdown, rising cost of living and low wage revisions, coupled with higher interest rates, are forcing salaried professionals who had earlier invested in properties in Patna to put them up for sale in Patna. Resale inventory has increased 30% in Patna real estate industry.

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People who had invested in properties in Patna some 5 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, resale inventory in Patna has increased nearly 30% over the last six months.

Economic slowdown has hit the Patna real estate industry. Salaried professionals, who had invested in properties in Patna 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. The resale market of flats in Patna 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 in Patna 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 in Patna.

Primary buyers are willing to deal in the resale sector than new homes due to the risks involved in new projects. Home buyers in Patna 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.

This situation will, however, not attract investors. Such deals will attract primary buyers. But people, who are looking at investing in properties in Patna at this moment, may not consider this option.

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