What Lies ahead for Indian Real Estate, with the Ongoing Soviet war. It’s definite for Housing prices to rise due to input cost pressures because of Rising Crude.
The Russia Ukraine conflict will be having a severe impact on every indian household, already global markets are feeling the pinch due to instability in the region. The decision of Russian President Vladimir Putin to declare the regions of Donetsk and Luhansk as independent countries, followed by economic sanctions on Russia from the US and European countries, Especially freezing russia out of SWIFT banking system.
To understand, Crude prices are at the highest since 2014( Crossing $99/Barrel). The rising oil price is the reason why inflation is likely to increase, and worsen with the situation ahead. There could be a serious rise in the price of oil and petroleum products to other goods and services.
Russia is one of the Key Exporters of Oil & Gas with the Given sanctions their will be a shortfall unless OPEC countries mitigate the GAP but that is unlikely as well due to production Cut agreements.
Impact on Prices
Due to ongoing conflict, the Oil prices are closing in on the $100 per barrel mark. India, being a major importer of crude oil, will have to pay more for oil and petroleum products. Thus will lead to fuel price rise further.
This may lead to Housing prices to increase as rising oil rates will have direct impact on prices of raw materials like cement.
With the Stock Markets Impacted globally, The Rising prices of raw material leading to Price rise won’t be adding to the buying sentiment thus Indian Real Estate can see a Dip April onwards.
Additionally Maharashtra government is all set to hike stamp duty on house registration by 1 per cent from the next financial year(April 2022), this will add to the Woe of Home buyers.
“Thus Housing Prices can rise by 10-20% in Coming Months but still with Ongoing situations and Restrictions adding daily, impact quantum is yet not certain”.
Inflation also is a byproduct of Global tension, supply chain disruptions thus, there can be rise in interest rate as When the interest rate rises, the cost of borrowing rises. This makes borrowing expensive. Hence borrowing will decline and as such the housing loans are at their lowest. Thus to Sum up for Fence buyers of Real Estate “March is a right month to zero down on their home buying decisions.