By Soniya Gaonkar on Jun 2, 2022 10:11:00 AM
Every individual plan to invest in real estate with a view to developing value. But with the rising inflation people encountered difficulties buying homes and even developers faced issues with increased rates. If you’re wondering about inflation and its impact on the real estate market, then keep reading.
Let’s Begin with What is Inflation?
Inflation devalues the worth of the cash you have, and you end up buying less as compared to the previous time. Inflation may affect the purchasing power of a homebuyer and the spending power of the developer too. Concisely, it is considered the most negative time in the economy, so people spend less in the time of inflation and sell more comparatively.
What Causes Inflation
It is no secret that with every passing day everything is becoming expensive, and this leads to a surge of inflation in the global market. There are a few reasons causing inflation:
- Prices increase eventually when there is more demand than supply in the market.
- Another cause of inflation is when the production cost of a product is more than the product's worth itself, it affects the price of the final product.
How Inflation Affects Real Estate Sector
There are different ways inflation hit the real estate sector. For developers, building a home gets affected because of the sudden rise in wages, expensive materials and supplies. Developers put their hard time into finding reasonable suppliers for materials and other necessary requirements. This directly affects the prices of homes and other facilities.
On the other hand, buyers who are seeking to buy a home also deal with the consequences of inflation. Inflation in both ways affects home seekers and developers.
In a time of inflation, borrowing money from banks becomes more expensive. Whether you’re a developer or a home buyer, higher interest rates affect the financial grounds of both. Property rates increase with the introduction of inflation and devalue the worth of money any homebuyer is holding to invest.
Some of the Stats Say:
- India is set to experience a 5% inflation rate for FY 2022.
- According to JLL research, real estate sales witnessed an upward trajectory of 65%.
The Question Remains, Is it a Good Time to Invest in Real Estate?
Finding the right place at the right time is crucial to making a profitable investment. There is huge infrastructural growth in the Real Estate sector and investing among multiple options can get you a good deal.
Everyone is looking for a home, but most people are confused between buying and renting. But with inflation coming into the picture, the decision to buy a home can give you a higher value if managed properly.
It is hard to predict the future of the real estate market but investing in real estate in recent times can give home seekers a great opportunity to invest.
Key Rule: Buy When You Are Ready
Read the market thoroughly before investing and make a wise decision to get the best out of the investment.
What to Foresee
The expectation is that toward the finish of this current year, the inflation will get back to typical levels and make it more workable for homebuyers to look for luxury flats in Pune and premium flats in Pune.
Excessive inflation is surely a legitimate fear among different players in the real estate business. In any case, it's vital to take note that while a decrease in the housing market is difficult to foresee, there is no information proposing that one is around the bend.
Opportunity in Inflation
Investment flourishes when you make the right decisions at the right time. Inflation is slowly touching the ground, and this is the best time to make your financial decisions. You don’t have to look around to find the best investment options. Kohinoor Group has made this easy for you. Kohinoor is one of the renowned real estate developers in Pune.
To solve the confusion of perfect investment, Kohinoor Group brings you a newly launched residential project Viva City - an address to the best work-life balance lifestyle. It is offering 2bhk in Dhanori. Dhanori is considered the most ideal destination for investment and top-notch residential projects in Pune. Don’t hold back, it's time to make the most of this inflation time and invest in properties that favors your decisions.