Traditionally, the term war has conjured images of hand-to-hand combat and brute military force. As technology evolves, however, the spectrum of “war” has grown wider. Now, we have to be as equally concerned, if not more so, about cyber attacks than we do physical attacks.
On 24 February 2022, Russia launched a large-scale invasion of Ukraine, one of its neighbors to the southwest. Early reports declared it the largest conventional warfare operation in Europe since World War II. It marks a major escalation between the countries that had been in a state of conflict since 2014. The invasion was preceded by a Russian military build-up that started in early 2021, during which Russian president Vladimir Putin criticized the post-1997 enlargement of NATO as a threat to his country’s security and demanded that Ukraine be legally prohibited from joining the military alliance. Residential areas have been affected as masses of Ukrainians and their families have been forced to flee their homes.
War has various effects on the countries involved, economically, socially, environmentally and the general morale of the people. War also has its impacts on real estate.
After Russia launched an all-out invasion of Ukraine by land, air and sea, the United States and Europe promised to retaliate against Russia by imposing the toughest sanctions possible, according to experts on Friday, February 25, that the unfolding conflict could spell a potential crisis for India’s real estate sector.
These sanctions will have effects on the Russian economy as a whole, as it will make the cost of doing business in Russia and with Russia very difficult, this will hinder some very wealthy men from making financial decisions as freely as they once would have been able to.
The impact would be felt in the form of an increase in cost of building materials, including cement, on account of rising crude oil prices and a possible increase in borrowing costs, they said. The unrest in Ukraine has had its implications on the US real estate/ housing market. The full extent of the sanctions is still being determined. Russian and Ukrainian buyers represent a small part of the overall U.S. real estate market, but experts agree that it will become more difficult for many Russians to do business in the U.S. Any transaction involving Russian oligarchs — who have purchased some of the priciest properties in Manhattan and Miami — will become much more challenging, experts say. The assets of Russian officials identified by the U.S. as having ties to or supporting the invasion will be blocked and frozen, according to attorney Harold E. Patricoff Jr. This could mean anything from real estate to cars, yachts or jewelry.
The effects could also be felt by the UK housing market; The British property market is already grappling with rapidly rising inflation, successive interest rate rises and the cost of living crisis.
There could also be further pressure on British house prices thanks to the conflict in Ukraine and the resulting economic fallout. Although Britain has very limited direct trade links with Russia, the conflict will inevitably have a wide, indirect economic impact. The Bank of England could increase the base rate -otherwise known as interest rate- in response to the Ukrainian conflict. Economist Andrew Wishart, of Capital Economics, told the Telegraph today: “We think a conflict would keep inflation higher for longer and potentially bring forward some rate rises.” This would mean loan rates rise – but savings rates fall.Consumers will feel the changes to the rate the most and that spells bad news for people with loans or mortgages.
In Ukraine specifically the effects of the war on the market is yet to completely be identified. But there will certainly be a loss of building and infrastructure, both privately owned and publicly owned. In the aftermath, homes and buildings will have to be rebuilt, whether or not this will be done by Ukrainians or Russians remains to be seen
