INDIAN real estate companies face a higher risk of default on their payments as access to cash gets tougher, Citigroup Inc said in a note to clients.

DLF Ltd, the nation's biggest property developer, second-ranked Unitech Ltd, Parsvnath Developers Ltd and Omaxe Ltd all reported second-quarter net income declined last week as a slowing economy deters buyers and banks tighten lending requirements.

"We do not see a major recovery in the near term," Citigroup analysts Ashish Jagnani and Karishma Solanki said in a note to clients.

The Realty Index of the Bombay Stock Exchange has declined 84 percent this year.

Investors have shunned developers on concern that a five-year rally in property prices and borrowing costs that had climbed to a seven-year high will curb demand, Bloomberg News said.

Goldman Sachs Group Inc said in a separate note that the earnings reflect a slowdown in the sector.