Warning for Homebuyers: Expect a 10-15% Price Increase
Warning for Homebuyers: Expect a 10-15% Price Increase
Government Initiatives Amid Pandemic
The real estate and construction sectors, heavily impacted by the COVID-19 pandemic, have seen the central government introduce several incentive schemes to spur growth. However, due to various new challenges, prospective homebuyers are now facing an additional 10 to 15 percent increase in costs.
Rising Construction Material Costs
Since January 2020, the prices of construction materials have been steadily increasing. Simultaneously, market demand has surged, forcing real estate and construction companies to purchase materials at higher prices without alternatives.
Price Hike in Materials
Over the past year, the prices of tiles, bathroom fittings, electrical fittings, and wooden materials have risen by approximately 20 to 30 percent. Unable to absorb these costs, construction companies have passed the price increases onto the customers.
10-15% Price Increase for Homebuyers
As a result, buyers of new construction projects are now required to pay an additional 10 to 15 percent. With the continuous rise in construction material costs, there is a high likelihood that home prices will keep increasing in the future.
Festive Season Sales
During the festive season, many real estate companies across the country offered significant discounts on home sales, leading to a surge in sales. However, due to the ongoing high demand for construction materials, there is only a 50:50 chance that prices will decrease.
Burden of Price Increase
In the past five to six years, there have been no significant changes in the prices of homes and buildings. However, the prices of steel, cement, tiles, aluminum, copper, and glass have now increased. Real estate companies are passing this price burden onto the customers without any absorption.
Impact on Future Projects
The increase in construction costs is not only affecting current projects but also future developments. Developers are now more cautious with new project launches, anticipating further price hikes in materials, which may slow down the rate of new constructions.
Strategies for Homebuyers
For prospective homebuyers, it is essential to consider these price fluctuations while planning their purchases. Opting for ready-to-move-in properties might be a more stable investment compared to under-construction projects, which are more susceptible to price increases.
Long-term Market Outlook
In the long term, the real estate market is expected to stabilize as supply chains adjust and new material sources are explored. Government policies aimed at reducing the cost burden on construction companies and boosting affordable housing could also play a significant role in stabilizing prices.
Conclusion
Homebuyers should stay informed about market trends and price movements to make well-informed decisions. Despite the current price increases, strategic planning and timely investments can still provide opportunities to secure dream homes without excessive financial strain.