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War Fears Stall Home Buys Amid Inflation Woes
15 Mar
Summary
- Geopolitical tensions and inflation are causing buyers to pause home purchases.
- Rising energy prices directly impact construction costs and developer pricing.
- Buyers must balance rising property prices with increasing borrowing costs.
Home purchase decisions are slowing as prospective buyers adopt a cautious approach due to ongoing geopolitical conflicts and rising inflation concerns. Social media discussions highlight buyer hesitation regarding long-term home loans amidst escalating oil prices.
A Bengaluru-based entrepreneur recently postponed a significant villa purchase, citing geopolitical developments. A broker observed a slight slowdown, attributing it to multiple concerns including AI's impact on jobs, economic uncertainty, and the current global situation.
Energy inflation directly impacts the construction value chain, affecting materials like cement and steel, as well as transportation. Developers may initially absorb some cost increases but sustained higher energy prices are expected to translate into higher project costs within one to two quarters.
Despite these pressures, factors like limited ready-to-move-in supply and rising rental values are helping to sustain property prices. Experts advise that for those with stable income and long-term goals, buying earlier might mitigate future price escalations, but emphasize balancing rising property prices with borrowing costs.
