Copper, wood, tiles, the materials are more and more expensive. They had already increased before the war because the pandemic had disrupted supply chains, and there were shortages. But the conflict literally caused prices to soar. Russia is the second largest producer ofaluminum and for the first time, the ton exceeds 4,000 dollars.
Direct consequence: the price of windows and pergolas soars. The same for steel, mesh and rods are used for reinforced concrete, essential in construction. Russia and Ukraine are important suppliers. With the war, the orders were stopped. Not to mention that the price of oil continues to rise. This inflates the price of transport. We saw it on Tuesday March 8: immediately after Joe Biden’s announcement of an embargo on Russian oil, the price jumped 5%. Result: the cost of renovations, but also the construction of new housing will increase.
Impossible to predict how much the increase will be, precisely, and that is the problem. These price spikes are so rapid and significant that builders, developers and building contractors are finding it increasingly difficult to draw up quotes. They are afraid of committing to prices which in a few months will have doubled or even tripled, and therefore of working at a loss.
It will also be more and more difficult to buy a home because the context of inflation, inevitably, will weigh. As households will spend more on food, gasoline, etc., they will have less money for everything related to housing: paying a loan for owners or rent for tenants. In addition, in this context of war, bankers are likely to be a little more selective in granting mortgages because they do not know how the economic situation will evolve.
Interest rates have already risen since the beginning of the year – it is now necessary to count 1.2% over 20 years, against 1% last year, according to the broker Best rate. What further reduce the room for maneuver of the French.