Should I “Sell My Property” In Today’s Scenario?

Sanjeev Kathuria(Founder, Author & CEO at Torbit Consulting) - August 31, 2020 - - 0 |

Corona Pandemic has left the world economy devastated. Most of the major economies around the globe are deep into recession. Millions have lost jobs. Salary cuts are visible across all industry segments. Forgetting incentives and raising survival has become an issue. The loss of human lives has left us nervous and we do not know the extent to which people will lose lives and livelihoods as corona refuses to leave the world today.

India has demonstrated a brave fight until now in saving lives by way of stringent lockdown. The economy is battered but yet the IMF and other credible agencies do not show India falling into recession though it is widely accepted that we will see deflation.

The government has started opening the Indian economy in a staggered manner post-Lockdown 3.0. Various financial stimulus and policy measures are being taken to save the most vulnerable people and businesses which are at high risk

Industries like Pharmaceutical, Education, Telecommunication, Consumption (Essentials), Logistics, Agriculture, and IT/ITeS look less vulnerable and are expected to bounce back into action sooner than later

Industries like Automobile, Real Estate, Hospitality, Tourism, and Discretionary Spending are some which are badly hit and will surely take some time to recover.

The government is working on the bottom of the pyramid helping Agriculture, SMEs, and MSMEs by providing various fiscal stimuli so that they don’t get washed away in this economic crisis. It is further expected that all industries which are employment generators will get boosted in the coming days. The Real Estate Sector which is reeling under Liquidity Stress, Lack of demand, and Labour is expecting the govt to lend a helping hand in bailing out the crippling industry.

In my last blog, I explained in detail how to analyse the current situation before you finalize your decision of buying your flat in the current scenario….

Should I Buy A Flat Now Or Wait Until Coronavirus Pandemic ends?

I have received a multitude of questions asking me to write on –


To answer the above I considered the following-

  1. Purchaser is an End User or Investor
  2. Property Ready to Move in or Under Construction
  3. State of Personal Finance

Here we go with a detailed explanation: –

  1. If the property is ready to move in implying that you are using it (residing in the said unit) then you should not sell until and unless there is financial stress because of job loss or salary cut or for any pre-committed financial or personal obligation that needs to be met. Your home is an asset that covers you emotionally, and socially in good times, and works as an asset with a large capital value in case of need for any god forbid reason. Sell only if you have a financial requirement.
  2. The investor is never emotional with his money allocations and has the characteristics to not overcommit so as to be able to handle all eventualities arising from crisis situations. If you are an investor and possess a ready-to-move-in property where you live you can CONSIDER SELLING and taking the same property on rent. Residential rental returns hover in the range of 2-3 %. You surely can make a better return on capital by investing in a different asset class. There is just an additional point that I would like to mention – COVID will delay delivery by at least one year hence there is a good chance that the tenants will need to extend the lease period which will derive some lease rent enhancement. We could see residential returns touching 4% or more. Hence consider a 4 % return and then decide whether you can invest in another asset class and make some extra money. SELL if you are a smart investor who can make a return in double-digit by deploying your capital safely.
  3. As an end-user, if you have bought an under-construction property and have no financial stress caused by Corona Pandemic (presuming you had made a well-informed purchase decision considering rent v/s purchase, family finances, location, accommodation, and the developer) DO NOT SELL. Purchasing a home is a herculean exercise and there is time cost and financial cost to it. The only reason that people in this category consider selling is that they feel that prices will go down. Let us presume the prices will reduce between 5 to 15 % – The cost of selling the property, foreclosure of loan, brokerage, and then buying again after a couple of months is not only expensive but also time-consuming. There is an opportunity cost of finding the right product at the right location with a good developer which you do not want to miss for a small incentive. Hence my submission is DO NOT SELL if you are an end-user who has made an informed purchase decision and who is not troubled by financial volatility arising out of corona pandemic. However, if you have encountered a financial accident arising out of the pandemic, meet the developer and discuss if there is a mutual way to handle the situation at this time by virtue of restructuring the payment plan etc. If it works very well but if you are not left with any solution you may want to surrender your apartment to the developer or SELL IT IN THE MARKET.
  4. Investors who have bought an under-construction property can be put into 2 categories

(i) one who took a home loan to buy an under-construction property

(ii) one who invested from his investable corpus.

Category (i) investor can CONSIDER SELLING his unit – closing the home loan and getting his share of the down payment back reason being that the home loan rate is not going below 7.5 % in the foreseeable future and the property prices are not expected to increase in the current situation. Hence his capital value will depreciate basis the interest he has to pay to the bank.

Category (ii) You can take a chance by waiting for at least 6 months in which the government may fuel the demand side by virtue of reducing GST or by reducing the stamp duty cost or giving some tax benefits which may see high volume inventory absorption thereby increasing the price of the property. The increase may give you a 12-15 % yield Y-o-Y thereafter.


The decision of selling a property is as important as that buying the property

Both require detailed analysis lest you end up losing money. I have tried to put my findings in a simple manner so that they can be easily understood and help you make an informed decision.

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