Rise in raw material prices to disrupt homebuying – What should home buyers do?

At the point when real estate in India had begun showing some strong signs of long-term recovery, a steep jump in the costs of key raw materials like cement, steel, and so forth, has intensified the issue further. 

Rise in raw material prices to disrupt homebuying – What should home buyers do?
This could also slow down the current momentum in sales that is being achieved due to rational pricing by the developers.

In the backdrop of the Russia-Ukraine war situation, the prices of raw materials have gone up significantly which is currently one of the major concerns for realty developers across the country. 

At the point when real estate in India had begun showing some strong signs of long-term recovery, a steep jump in the costs of key raw materials like cement, steel, and so forth, has intensified the issue further. 

Jitesh Lalwani, President – of Homesync Real Estate Advisory says, “There is an immediate requirement for government intervention to curb the consistent upsurge, otherwise, the developers and eventually the homebuyers will face a massive burden of the rising costs then.”  

Additionally, experts say this could also slow down the current momentum in sales that is being achieved due to rational pricing by the developers. 

Shraddha Kedia-Agarwal, Director, Transcon Developers says, “The rising cost of raw materials with a looming demand-supply scenario is paving a path towards price hikes in the coming quarters. 

He further adds, “After the impeding after-effects of the coronavirus induced lockdowns, when the industry started to breathe a sigh of relief, the prices of many raw materials has jumped drastically to a good 20-30 per cent.” 

Note that, with the increasing costs and pressure, experts say developers are likely to pass on the hike to the homebuyers soon.

Agarwal points out, “Although the developers have tried to soak in the price hike, the final pricing of the properties may be affected at some stage going forward. 

Additionally, keep in mind that the aftermath of geopolitical tensions, market fears, disruption in the supply chain, and record-high crude oil and key material costs are determining the prices of new property listings in the market. 

There are chances that the property prices are likely to shoot up 15-20 per cent in the next six months. “This will be unavoidable since such a phenomenal change has the potential to completely break off the recovery rhythm of the industry,” adds Agarwal. 

What should home buyers do?

With the property prices likely to shoot up in the coming months, experts say home buyers are trying to secure a home before rates get higher. Having said that some homebuyers are also wondering if they should hold out on house hunting and wait for price gains to reverse. 

But considering the current situation, Lalwani of Homesync Real Estate Advisory says, “prices aren’t likely to drop in the near future, affecting the current momentum in sales that were being achieved due to rational pricing by the developers.

Having said that, experts say, homebuyers have become more proactive in home searches and eagerly looking for their dream homes before the price hike is pragmatic. 

“Unsold inventory and current demand to own a home will keep the homebuying spree on an upward trend,” explains Lakwani. 

If it comforts the financial situation, Agarwal of Transcon Developers says, “then even higher property prices on the horizon won’t hold off the homebuyer from purchasing a home right now.”

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