The price of everything has skyrocketed this past year, so there’s no denying the impact of inflation on real estate. But that doesn’t mean you can’t purchase a home.
If you’re planning on buying a home in these uncertain times, there is light at the end of the tunnel.
As the head of the household, it’s your responsibility to ensure your family lives comfortably amid rising expenses as well as to secure a safe future for them. Therefore, you need to be careful about where you invest.
In order to make the right investments, you need to plan a strategy that enables you to stay within budget and buy a home. But before we start on how to invest safely during times of high inflation, let’s take a closer look at inflation in Pakistan.
The rate at which prices are increasing is alarming. According to a press release issued by the Pakistan Bureau of Statistics, , the National CPI for August 2022 recorded an increase of 27.26% as compared to the previous year i.e. August 2021.
During the same period, the report highlighted an increase of 27.77% in construction input items, such as bricks, cement, steel, etc.
There are several ways inflation influences the real estate market. Let’s look at a few of them in more detail.
Unfortunately, as you can see, inflation affects people with low incomes more than others. For instance, the price of properties increases, and borrowing becomes more difficult.
But it’s not all bleak and dismal for everyone. In fact, investing in real estate during inflation has its perks. Investors will find that the value of real estate appreciates more than stocks, bonds, or gold.
More specifically, investors of residential properties benefit the most during high inflation. Since people have reduced purchasing power, they are more inclined towards renting a home than buying one. So the demand for assets such as apartments and single-family homes typically outperforms other investment options.
Buying a home is a good way to build wealth. As home prices rise, your net worth increases as the value of your home increases.
But with the cost of basic necessities increasing and the price of today’s real estate market constantly on the rise, is real estate a good investment during inflation?
Well, the answer depends upon your current financial circumstances.
It’s the ideal time to buy a home if:
However, it may be wiser to wait if:
If you decide to buy a home, you need to mitigate the impact of inflation on real estate. Here are a couple of tips that will get you started in the right direction.
The impact of inflation on real estate can be felt far and wide. But if you’re thinking about entering the current housing market, you need to do your research and invest smartly.
Your best option is to consider a reliable real estate developer like Chapal Builders. The affordable, high-quality residential properties can help generate positive returns in the long run. Consider booking a flat or villa in any of the Chapal’s developmental projects at various locations around the city and enjoy the perks that are part of a safe investment opportunity.