News: War and Inflation Fears Make Homebuyers Pause Loans-14-03-2026

Home purchase decisions are slowing as buyers wait and watch amid the US-Israel-Iran conflict and inflation concerns, brokers say, while prospective buyers on social media are asking if this is the time to commit to a long-term home loan.

A Bengaluru-based entrepreneur who had been actively looking for a Rs 4-5 crore villa in the city recently put off the purchase by a few weeks after the latest geopolitical developments. A broker involved in the transaction said decision-making has slowed slightly in recent days, with buyers weighing the effect of artificial intelligence on jobs, broader economic uncertainty and the geopolitical situation.

On Reddit, one user noted that oil has crossed $100 per barrel, which historically signals inflation, and asked if home purchases should be postponed. Another, aged 28, described plans to buy a Rs 1.63 crore apartment in Undri, Pune, with a Rs 70 lakh down payment and a loan at about 7.2% for the rest, on a take-home salary of roughly Rs 1.6 lakh a month. He asked if buying a flat "at the brink of war" was worth the commitment.

Real estate experts say costlier energy, particularly LPG, diesel and electricity, could gradually raise construction costs and eventually property prices. Kanika Gupta Shori, founder and COO of Square Yards, said these inputs affect cement production, steel manufacturing, brick kilns, transport of materials and on-site work, so higher energy prices put pressure on developers’ input costs. Developers may absorb part of the increase at first to protect demand, especially in price-sensitive segments, but if high prices persist the impact usually appears in the pricing of new projects and launches. Construction cost indices, she said, typically respond with a lag of one to two quarters after a sustained rise in energy prices.

Experts also note that real estate has historically been a partial hedge against inflation, especially in cities where employment growth and urbanisation support housing demand. Shori said rising land and input costs tend to support property values over time, as do limited ready-to-move-in supply in high-demand micro-markets and rising rents in major employment hubs.

For end-users with stable income and a long holding horizon, she said, buying earlier can sometimes protect against future price escalation. She cautioned that financing conditions matter, and buyers must balance rising property prices against the cost of borrowing.

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