Looking to invest 15million for Return on investment in 2 years. is it right time to enter market as there is speculation that market will take correction after eid. Cant decide where to invest and when to invest. The more i read about real estate the more confused i am. Any investment with gd rental can also be considered. Investment can be stretched to 20million in case of better prospects. Its my first investment so i need all the help i can get from this community. Thanks for sparing y
our time.
If you can hold bit longer than DHA 10 is a good option.
If you’re a risk-taker then pick a plot in State Life 2.
A property dealer has been pitching up Jasmine Grand mall Bahria town for investment as they are paying immediate 6 percent annual rental with lum sum payment which few people find tempting. Any comment on it is appreciated. thankyou,
Previously, people were speculating real estate market would take correction throughout Pakistan due to higher CGT taxation being imposed in budget+amnesty scheme uncertainty. Now that taxation has been removed and CGT has increased by a slight amount. As for amnesty scheme, all pointers lead to amnesty being extended. Finance minister mentioned on Geo that they intend to extend amnesty scheme when it expires and yesterday’s news was that negotiations with IMF are underway to approve amnesty scheme. So very unlikely that market does take correction now at least till December (it is expected amnesty will be extended for 6 months till december 31). There is a gap of six months where you can invest and make a profit. But you’ll have to re-analyse in December whether to further hold or sell your investment.
@Asad, I think amnesty has exhausted it’s potential and there isn’t much juice left in it to further jack up prices.
Particularly for DHA Lahore, the risk of correction is there unless some fresh money pours in. The moment market shows lethargy, it will trigger profit-taking and investors would like to bail out with highest return. Tail-enders will be looser like always.
To me 100% price growth in 8-10 months isn’t sustainable, specially when the supply is abundant. Shows speculation.
Govt is closing other avenues of black money and will continue to do so because of FATF. Right now, people are still selling their discontinued high denom prize bonds so plenty of black money is still lying around. That will continue to rush into real estate provided that amnesty is extended. Also, plenty of good news have came out REITs are restarting once again and PSX has set up a REIT subsidiary. The other injection of cash will come from overseas Pakistanis but only once flights open up especially from UAE.
For next six months, I don’t see much risk if amnesty is extended but after that, you’d have to re-evaluate (in Sindh alone, there are a few hundred amnesty scheme projects still pending for approval). Generally speaking, till the end of this new financial year I don’t expect a significant correction because govt is giving construction/RE all the support it for several reasons. As for the price growth over last year, yes definitely there has been speculation and currently the areas being speculated like 9 prism, DHA multan, DHA 10 and 13 will be major losers when correction does occur. The other main phases like 6-8 have already gone past investor stage, now only end-users remain or very long-term hold investors. So those phases will not see much correction as their price is being driven by genuine demand from end-user. Also, I mentioned this before and others have as well, market had been stagnant from 2016-2020 due to unfavourable policies and the slow price growth that should have occurred during that time has made that leaps over the last year.
I expect a solid correction whenever govt brings back unfavourable policies and completely removes amnesty scheme. So maybe July 2022.
as mentioned by Asad sab, the areas where end buyer is purchasing will have no effect of market correction, but those files or none possession plots can have a big dip in Dec. So better go for fully possession and semi populated areas and you are safe.
In ISB i have seen a trend whenever there comes some crises or some market correction in Private societies. CDA rates starts increasing. the reason is at those time the end user and investor starts looking for safest and secure options to dump their money.
very informative input, thanks alot. DHA Prism prices are going crazyeven without possession and no grounds to justify the spike. Looks like its too late to ride the spike. Not sure about DHA phase 10 although that too has seen a decent spike.
Yes prism prices are going higher and higher. It’ll probably still gain more because it is every dealer and investor’s favourite phase for investment so big investors will continue piling money there. But the bigger the rise, the harder the fall whenever it comes. Same thing happened with phase 8 back in 2016. It was investor’s favourite phase and then the market crashed and market value of the plots fell by almost 25%. It took four years (in 2020) for the phase 8 plots to recover their lost value.
@nice.isb Agreed, time and time again we’ve seen that end-user areas and societies are not effected that much by market crashes or corrections. 5-10% up and down in prices is fine but they usually don’t suffer major corrections that speculative investor areas do.
how are you seeing dha phase 10 shaping up in near future, as soon as possession is handed over to dha prism , the obvious next stop for investers is phase 10. Is it the right time to get in in there or one should wait for this little bubble in phase 10 to burst. I am sitting with 15 million in my account and every passing day i think i am losing buying power due to inflation.
DHA 10 is long-term investment, any area with files is always a long-term investment. If you have holding power it makes for a good investment, but if you are looking to speculate in short-term then it is not good as file prices are unpredictable and risky in short run.
It’s very difficult to predict what the real price of DHA 10 should be but the current 85-90 lac for 1 kanal does seem high to me. I say this because when phase 9 prism was balloted in 2015, prices were around 50-60 lac there and phase 9 prism has better location and access. Within a year, plot prices did balloon up to 1 crore (location-wise rate showing it was undervalued) so taking that into consideration, realistically DHA 10 should be prices below 80 lac. It is expected balloting will happen in 2022-23 so balloting rumours can push price higher up later. But once balloting happens, you’ll have to wait 3-4 years of stagnant or slightly up/down prices before possession rumours kick in and real gains are made.
Cant thank you enough for sparing your time. I am wondering if you are a property consultant or realtor because i have heard they usually charge a nominal fee for a specific financial advise so i am confused if i should be asking you this here. Planning to invest 15 million for 2 years and another 15 million for a decent monthly income here in lahore. Any specific advise or direction you can guide me on investment anywhere in lahore these days is highly appreciated. I apologize if i am bothering you too much.
No worries. I’m not a consultant, I’ve been investing in real estate for many years now. Currently reside in Lahore so very well versed in real estate market here.
In Lahore, most profits are to be made in DHA because overseas Pakistanis trust the band and invest heavily in it. DHA 10 and 13 are long-term projects which as I said will take around 5 years before possession activity starts. Within your 15 mil budget, you can get about two 1 kanal plots (if you stretch the budget a bit slightly). Your investment will probably see around 3x gains within 6-7 years. DHA 9 prism has a six to twelve month window where it will continue to gain due to possession rumours before prices will come down I believe. Though, prism will double in price within 4-5 years I believe but within your budget right now, it will be difficult to get a decent plot. For 15 million, you will get a bad location plot near a village/hudaiara drain. Other areas of investment would be LDA, NFC 2, Bahria Lahore but their locations are quite some far from city and their demand isn’t like DHAs. Then, state life phase 2 isn’t bad, location is quite good and rumours are it might merge with 9 prism which if it does will give it a massive boost. Lastly, there is Lahore smart city which is very well planned and it has already gained a few lacs since booking. It is also a long-term project and I think its files are floating at around 55-60 lac for 1 kanal. It is a good investment because it’ll easily cross 1 crore when possession arrives.
Given you a full breakdown. Where you want to invest would be your choice. If I were you, I would invest in DHA 10, leave the investment till possession, then with the rest of the money buy in smart city. Also if you have 2 year holding period, stay away from real estate because I do expect a major correction in 2022-23. Better to invest with a long-term holding period in mind.
Thanks alot… Budget is actually 30 million but i have decided to invest 15million in property for rental income and rest of 15 million in property that has gd potential to appreciate. What i understand by now is that the property is a game of holding so 2 years plan not feasible and i need to reconsider my strategy. Is to wise to go in for on ground property with rental return with all 30 million and is it too unrealistic to expect 10% rental per annum in highly commercialized areas like gulberg? DHA and bahria have rental of 6% per annum. There are a few shops on sale in xinhua mall gulberg for sale with 10% rental per annum. Also some projects in gulberg which are giving 10% rental on lum sum payment i,e 3 jays . How do see these investment in gulberg with that high rental per annum plus how good is there liquidity.
Not too fond of rental income and investments so cannot say much about that.