For people planning to buy property in pakistan

Buying Property Want To Buy
#1

An article written by a reputed property agency:

The property bubble occurs due to high speculation which artificially increases the property demand. As there is no real demand, every property bubble bursts and we see massive price crash. In 2005, Pakistan real estate bubble collapsed and people lost millions of rupees. The property market took several years to recover the prices. Once again we are in trouble but most important thing is to know how property bubble will burst in Pakistan.

Current property price trends

Pakistan real estate sector was in bubble phase since November 2016, when property tax amnesty scheme was introduced. But now due to massive crack down on black money, this bubble has started to collapse. Asking price has decreased by 20-25%. It’s just the start of a lengthy process which will take many months to complete.

Why property prices are falling in Pakistan?

Investment has huge impact on property price as it increases the volume of transactions. When transactions are high, property prices rise. Ironically, Pakistan property market was alcoholic of black money and foreign remittances. But now black money has been blocked by SC and remittances are decreasing too. Due to less investment, property prices are falling.

The market behavior

The only buyers at the moment are the honest tax payers who want to buy a place for living as they are fed up of paying rents. The genuine buyers have low purchasing power, so only small & cheap properties are changing hands. Property search and queries are still strong, but buyers are waiting for the big bargains.

How property bubble will burst in Pakistan?

The current property prices are not sustainable as investment in drying up. Property price crash is written in the sky. The only question is what course this crash will take. There are three possible scenarios; hard crash, soft crash and long stagnation. We will see 35-50% property price fall followed by long stagnation. But this time crash will be bigger than that of 2005.

Which areas will be hit hard?

Property price fall will not be same across Pakistan. Some areas will be hit hard where others will see only price stagnation. Areas which are less inhabited and have high speculation will be hit hard. Areas with moderate population and some speculation will see moderate price fall. On the other hand, areas with high density and low speculation will see only price stagnation.

Luxury versus affordable properties

Luxury properties are always the first victims of property price crash, whereas cheap properties only see price stagnation. This is because luxury properties are the main target of black money people and cheap properties are bought by the genuine buyers. Houses of worth up to 10 million PKR will see price stagnation but high end properties will see hard price crash.

Losers and winners

Every real estate crash has losers and winners. The people who bought properties at peak price in early 2017 will be the losers. This is because they bought properties at high rates and after crash property price will be less. On the other hand people who will buy the properties after price crash will be the winners, as at that time prices will be very affordable.

How much time it will take to bottom out property prices?

In every property crash some people make a killing due to wise decision and right timing. The most important thing is to guess the time when property prices will be bottomed out. As SC has opened the mega corruption cases and investment is drying up, so it will just take 4-6 months for crash to complete and further 4-6 months to bottom out the prices; the right time to start buying again.

#2

Crash in land prices is good for builders and construction workers. Lower plot prices will bring genuine buyers in to market who has been waiting for right bargains since last hike of 2012-13. Right now market is totally dead. No buying/selling at all.

#3

JDM,

so is it the right time now to enter the market?

#4

Shahzad: What do you mean to enter the market?

#5

Shahzad: If you mean to buy a plot or house, then apparently it seems wise to wait for few months and Allah knows best.

#6

Asif I mean to say since pricing are in declining so can I buy plot for future, moreover waiting for few more months what are factors wic can bring more good fortune.

Please share.

#7

Shahzad: You may wait like 2-3 months and then decide… Are you planning for short term or long term investment?

#8

I’ve plan for maximum of 2 year investment but unable to find reliable project where you can gain good roi in that period

#9

If you ask any dealer, they always have one thing to say. Buy, buy and buy more. Even when they themselves say that market is dead. Because this is their bread n butter.

I personally think that stagnation has turned in to decline and this is not the time to buy. Investments are exiting and enhanced accountability is creating panic among black money holders. If you buy now, then forget about selling for another 5-10 years unless you are ready to take loss.

#10

Jdm and asif,would u plz mentioned some reasonable places where prices have declined much so that one can take benefit of buying at decreased prices.

#11

I have a 25x40 plot in CDA sector. I paid 75+ almost 2 years ago. Best offer that I got so far is 65. So it all depends on who you talk to. For a dealer it’s always green as long as he can sale his future promises. Same is the case in Zone-II. You get to know real worth of market when you try to sale your own plot.

#12

JDM your plot case never reflects market trends as your buying can be thoroughly faulty when it comes to price tag or location.Maybe you are talking about g-13 or d-12 and there is not plot of 25x40 in these sectors for 65.Whosoever is placing this offer is definitely playing with you.One of my uncle got a 25x40 plot in g-13/1 and the plot was sold for 81 lacs within the matter of days recently.Definitely market activity is not that much but the way you and asif sb is trying to portray the situation,it is not that bleak either.

#13

@JDM, would appreciate if you could mention the specific projects where prices declined significantly. There is stagnation no doubt, but still we can’t find good projects with declined rates.

#14

To Buy: Phase 8 now or wait 3 odd months? It can fire back, if waiting for 3 months resulted in increased prices in Phase 8…?

#15

Inam sb,i personally feel that the overpriced places such as private societies near new airport,cda sectors such as I-14 etc. Which have poor development standards and just rose for nothing over a short period of time and ridiculously priced,expensive for nothing zone 1 houses may see a little bit of decline.Genuine places where demand is there for houses and plots would remain stable if they don’t see a rise.Usually when the general elections are getting near, market definitely enters a stagnation phase due to uncertainties attached with process plus this time,the political scenarios taking dramatic changes on daily basis along with the tough policies for realty sector are the main factors of the present state of property sector.

#16

Anybody any share about DHA phase1 Multan what is scope of it? In future can we expect price spike their??

#17

@Falcon, fully agree with your analysis. I also think so about zone 2 where prices shot up disproportionately. That’s bound to see southward trend. Yes no doubt genuinely developed and livable areas will see only stagnation if not increase.

#18

Stagnation will be there for a long time,and decline which is already there in the plots of DHA lahore bet 15- to 20 %, and karachi dha and clifton area decrease in home prices as well.

so signs are there for a decreasing prices overall market.

if the crackdown on black money and crooks continue then WE will see some massive decline in LAND( PLOTS ) Prices across the country.

Houses of 1 kanal and above plus 14 marls for investment purpose could see some correction of 20-30 % could be if not sustained by construction material prices.

#19

Remember there is an oversupply of costly land(plots) against the genuine buyer purchasing power so it will come into play especially in areas where overnight jumps have occurred.

How many people can afford 10 marla or 1 kanal plot @of 5 to 10 lack plus per marla, middle class is just 30-60 million and have somesorts of home in possession only half need home or land for construction and its not in their income range to save for a plot above 1 crore.

Overseas are feeling punch of decreasing earnings or job losses so can afford something below 1 crore .

whats your thoughts please write forum members.

#20

Zarak, very well explained. Plot prices going down is a good sign for new construction. Government should also remove duty on imported building materials so builders can construct new houses at cheaper cost.

Duty on wooden doors, windows and kitchen fittings should also be removed. It will help save our trees. We are too dum to cut our own trees for new houses wood requirements. We can buy cheaper wooden products from china and Vietnam and help protect environment in Pakistan.

Get the Zameen App

Buy and Rent Property faster and better
using our app.
Scan the QR code to
get the app

Get Connected

© 2007– Zameen.com. All rights are reserved.