2016 Islamabad property outlook

Projects & Developments Residential Schemes
#22

@Furqan Hameed. I am inclined to agree with your analysis. After much delays and controversies, the inevitable might just happen this year. While the odd price fluctuations will take place here and there, opening of the New airport in my view will be the Headline news for the property market of Islamabad/Rawalpindi in 2016, though more likely towards the end of the year.

Regarding your second point, I doubt it. I don't see any chance of Bahria making an entry near NIIA. After what they have done in BE, they are hardly in a position for a new launch in the twin cities. As for DHA, I very much doubt that as well and the AWT housing scheme will remain the Army's flagship project in this area.

#23

Brothers,

I’m not an expert in Pakistan real-estate so I’m asking forum member guidance to spare some time in this important discussion. Global economic outlook for 2016 and its impact on Pakistan real-estate. I would appreciate your analysis based on the following factors. Do you think the property in Pakistan would affect negatively or global factor do not effect Pakistan property?

• Low oil prices

• Overseas Pakistani invest less in 2016 due to job loss

• High external and internal debt for Pakistan government

• Rupees devaluation (Circular debts)

• Regional conflicts (Iran ,Saudi, Middle east)

Below are some news taken from the media.

“Countries highly dependent on oil exports, have also experienced sharp cuts in budget revenues and gross domestic product. The World Bank estimates a 10% decline in oil prices can shrink economic output in some oil-exporting countries by 0.8% to 2.5%. Even Saudi Arabia, which maintains large fiscal reserves, ran a deficit of nearly $100 billion last year. In response, the kingdom just announced economic reforms and austerity measures to curb spending and raise fuel prices. Officials are considering a public offering for state-oil company Saudi Aramco, which has more than 10 times the oil reserves of ExxonMobil. In the midst of heightened tensions with Iran, a costly war in Yemen and a generational shift in Saudi leadership, these measures to renegotiate a social contract that has existed for decades are challenging.

"Fewer jobs means less home buying demand and that will naturally soften the housing markets in those job-impacted areas," said Lawrence Yun, chief economist at the National Association of Realtors. For example UAE and USA (Few states) real estate market is performing badly.

Just this week Morgan Stanley warned that the super-strong U.S. Dollar could drive crude oil to $20 a barrel. Not to be outdone, Royal Bank of Scotland said $16 is on the horizon, comparing the current market mood to the days before the implosion of Lehman Brothers in 2008."

One factor that I’m sure will benefit properties near to the New Islamabad airport by end of 2016.

#24

2016 has the potential to excite the real estate market at least for Islamabad. There are many new developments and launches expected, including: clarity on new airport; KH phase 2 start; progress on Islamabad highway signal-free corridor; launch of Kuri model town and new road infrastructure in zone 4; possible announcement of MA (uncertain yet); and Bahria coming out of stagnation.

The last part (Bahria revival) would have more pronounced effect coze this was the one that sunk the whole market at first place. Remember the BE-II fiasco?

#25

Isloo, thanks for the input. Those are really good indicator you have highlighted for Islamabad. Also include rwp ring road from rawat to the new airport.

for Bahria, I'm still uncertain due to Lahore ring road issue. Though bahria has taken stay order from court but still people are angry over this issue as Bahria knew about the ring road but still kept on selling plots. BT-Karachi is also in minus but picking up slowly. It is difficult time for Bahria as they have to deliver DHA valley.I think once valley and BE-2 is fixed then bahria can focus on other projects. My feeling is that this is the reason MR delayed the launch of Peshawar. Hope 2016 will be the rise of bahria.

#26

The lower the price of oil, the better the ability of the Government to start and complete infrastructure projects. Remember this government has a fetish for roads, bridges, corridors, bus/railway and construction in general.

All these projects being awarded and completed will no doubt drive up the prices of adjoining real estate. I therefore see a very strong growth in the property sector in the next 2 years to 5 years time frame.

People who have invested in key areas of Islamabad, Rawalpindi, Lahore, Multan, Gujranwala, Peshawar and Karachi will most likely gain windfalls inshaAllah if they have holding capacity.

In my opinion strategic areas to invest are those where China Economic Corridor or Metro is planned. Other considerations are proximity to major developments such as airport or mega international mall or mixed use projects such as the World Trade Centre.

The worst thing an investor can do is to lose patience and liquidate investments in strategic areas. This is a typical practice among short term contractors.

My advice is that people who hold real estate assets in proper city limits such as RDA, ICT, LDA, MDA, KDA etc must hold on to their properties for a further 3 years at least.

#27

Paki, very well said about government love for infrastructure. So it is highly likely they will complete all major projects before 2018 election :slight_smile:

#28

The barrel price of oil is dropping like anything so how much of an impact should we expect on the following:

i. Economy of Pakistan;

ii. Political standing of ruling party;

iii. Real Estate;

iv. Industrial and commercial activity in the country.

?????

#29

Pak debts are increasing drastically. Not a good sign for Pak economy. In my point of view property prices can only increase when ppl will save some earning which is currently not possible.

#30

@Pardesi, my swt brother , believe me even if the oil is given free to our country and we grow wheat and other crops sufficient for more than double the current population requirements we will still suffer and hunger/poverty/disease will flourish till the corrupt system of politico bureaucratic brutally exists.

Curse is not destined in specificity, rather individuals as a group /society invite it in the form of their intentional/unintentional sins, and that we do as a nation ,by electing the worst pharaohs of all times.

AM SORRY FOR THE DISTRACTED VIEWS.

PROPERTIES/SOCIETIES, majority schemes are run by billionaires ,who earn by all means with no ethics attached , so the only sword which was hindering their zigzag activities seems decamping at the end of 2016 .May ALLAH bless Pakistan.

3 societies in Islamabad to rise.....DHA....DHA....and again DHA.

#31

The new tax amnesty scheme for traders will also mobilize hidden money that will play up property market.

#32

I am not an economist so can I ask you guys How the drop in oil price will affect our economy negatively if we are buying at less and selling at more?

#33

I think the main drivers of will be the pace of development on the ground by DHA and BT along with remittances from overseas Pakistanis. I don’t see much chance for improved remittances due to the economic conditions across the world, and DHA and BT are not really doing much on the ground except for BT in Karachi, but that is a huge projects and BT will likely keep flooding the market with new plots in order to get as much money as it get its hand on.

#34

@ Imran Khan

It will not affect our economy directly because we do not produce oil but can indirectly. Currently the fall in prices is due to less global demand and an oversupply and that is from the biggest consumers of oil like China, USA etc. They are facing economic turmoil despite strong dollar and it may affect our exports due to low demands in those countries (to some extent).

But that has no direct impact related to oil.

ya maybe we would not get foreign aids or loans from rich countries facing oil prices ordeals as they would not get their income.

KSA after so many years is now facing a budget deficit.

As far as real estate is concerned the only issue i can think of is redundancies in oil producing companies including overseas pakistanis. Foreign remittances maybe hurt due to loss of jobs esp. In the gulf.

Also ban on muslims in many non-muslim countries is another issue nowadays.

#35

Unfortunately Pak is not seeing any major impact of huge reduction in oil prices. Otherwise it could have been a turning point for a boom in our development like in our neighboring country. Pak should have reduced borrowing and should have become more self reliant but its not happening.

Reasons:

Our exports are reducing more than the reduction in oil import bill. Main reasons being security issues still keeping big investment away, huge energy shortages causing industry to keep shut and transfer to other countries offering better security and energy availability and rates. Govt is still incapable to reduce the huge losses of trillions in corrupt and inefficient white elephants like PIA, steel mill, wapda, gencos etc etc. How can you improve your economy when govts are unable to do things which they know are essential to do to bring real improvement?

Due to our inability to bring consensus on pak china corridor and work at fast pace, china is looking towards iran to use their chahbahar port. God forbid it can be a major setback if we don’t act fast.

There are improvements but are they enough, I don’t think so. I think the opportunities due to ongoing world economic conditions is are much bigger than what we are tapping. We need to act fast and act now……

#36

Muhammad sahab, you are right. Although it is heartening to see that the government is spending money from the national exchequer on public projects even if it is primarily in transport infrastructure. At least that is better than spending all the funds on wholesale corruption and dole outs through mass government hiring for political workers as we have seen in the case of the previous government.

But yes metros bridges are not the top priority. It is much more important to facilitate the industrial and agriculture sectors to prepare for quantum leap in exports to achieve self reliance and long term economic growth.

As you have rightly said, the China corridor is of utmost importance. But political governments are generally short sighted because they are unable to look far beyond the next election. Despite its many positives, this is one major problem with parliamentary democracy. Politicians will have to give top priority to winning the next election even if it means foolish non productive schemes like handing out taxies, laptops, income support etc.

#37

Any expenditure by the government that benefits the general public should be appreciated. The government does not have enough money to do everything it would like to do so it has to prioritise projects. Spending money on infrastructure and large cities is an important step in enhancing trade and creating employment.

#38

Anything about G-14/1, 2, 3?

#39

Some of the figures are below for friends of the thread:

Our last total budget was 44 billion $

Our last defense expenditure was 8-9 billion $. And you know these are paid by each Pakistani pockets through taxes

Our total govt companies losses like pso, steel mill etc are around 6 billion $. And you know these are paid by each Pakistani pockets through taxes

Present govt took a loan from IMF of 6 billion $ in 2013 increasing pak total debt to around 70 billion $

now you know very well what should be govt priorities and what are or have been our govt priorities due to their compulsions....

#40

Unofficially analyst are saying that total debt has reached near to $100 billion already. Is this a major bubble waiting to burst ? I hope you people know that since we can’t pay back the loan then the loaners can ask any thing in return.

#41

Though the debate is not matching with the title but when I read the comments of Arshad sahib that spending on big cities is good or on infrastructure is good but I totally disagree with him. Sir: on urban V rural I would say that if we spending our all money on big cities then everybody will try to come cities and then what happened no need to tell as Karachi example is there. On other you described that spending on Infrasructure is more worth then other sector like education/health. Here is live example We built metro in pindi Islamabad and spent 60 billion but surprisingly teachers remained on strike in Islamabad for a month as they did not get salary. My daughters are in F-10 IMCG and when I went to see principal she told me that 60% of teaching staff in this school on daily wages not even on contract. Another Example just compared the size of any metro station on blue area with emergency room of two big hospitals of Islamabad i.e. PMIS. Metro stations are so big, clean but empty always whereas emergencies of both the hospitals are very small not clean and patients are even on floor. I am not opposing metro or orange or green trains but if you kept us (90% of people who are going to these schools and hospitals) then I will not agree on it. At one side this government is selling PIA(in fact buying it as This Etizaz Ahsan saib today)and on other hand running the metro projects which are totally going totally in lose. I agree that metro is good facility and poor or lower middle people are enjoying it but they are totally in dark that we are availing this facility at the cost of educational and health lose of our up coming generation. Thanks

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