Rise of Property Again?

[mahmoodsalman (PAKISTANI-1)]

The property market of Pakistan has in the last 10-12 years seen some drastic ups and downs.

During the first few years of the Musharraf government, the property market rose phenomenally. I remember that DHA phase 8 Lahore files (and they were only files without even balloting) reached a peak price of Rs 8 million for one kanal in 2004/5 and then plunged and fell to Rs 3.3 million in 2006. This was the result of some scandals in the property industry. In 2006, people started to realize that if you have a file (without a plot and plot number) then you are sitting on a bubble.

Then after 2006 came 2007 when the lawyers movement, bombings and political uncertainty due to 18th amendment etc., property business and prices remained very low with only some areas where prices were rising. The rupee was losing its value and even if property prices rose numerically, the real value of property was going down.

Now, once again there is a fast rise in property prices in Lahore, Islamabad, Multan etc. The trend has not yet started as much in Sindh, Baluchistan and KPK, but can be expected to start if some law and order can be restored in these provinces. But still even these provinces are not doing too bad.

So the golden question is - property is rising again like in 2001-2005? Is this growth sustainable? Will it take a downturn if - Alah maaf karay - there are any law and order problems?

What are your views?

[truerescue (Waheed Akhter)]

The trends of our people are amazing and unrealistic always regarding so many issues including investment in property. Actually, one should follow the general rules of investment. 1. Always invest in the property you need personally in future or the property gives you the earning(rent) from the day one. 2. If the rent of the property gives you 10% annually of your investment/purchase price, it is safe investment and if the purchase price is high, it is inflated price and may deflate any time to fall you in hell. 3. Try to invest in businesses where your money is revolving and yielding something or benefiting the community,not being stagnant to nourish on the opportunities and fate of community.

[ijazabidkhan (Talib-e-ghilm)]

Unfortunately i have quite a grim view of real estate in islamabad. 1- property tax in punjab is horrendous. And the trend is dangerous it might escalate further. 2-cda has a lousy budget where they totally ignored islamabad pending yet much awaited projects. 3-bahria controversies are record high 4-nawaz seems much less interested in taking any paradigm changing steps in islamabad. 5-many societies are already dropping their values and many like b-17 have come ot a stabdstill for a while now. I don't know if it is the case or just my personal views but it is probably good for the low income ppl yet bad for investors. Wallahu aghlam

[saadzafar92_2 (Falcon)]

Sir actually property prices are balancing itself in accordance with devaluation of rupee against dollar.In that period of time which u have mentioned,everything got expensive except property so in my view point its the time for property now.Secondly many pathan brothers and sindhi brothers especially businessmen have invested their money in islamabad so in my viewpoint prices surge is not possible and god forbid if it happens it will not be so severe instead there will be very minor decrease or prices may come to halt.Btw prices are expected to increase after ramadan.Secondly in my view bahria has no controversies and the and especially phase 1 to 6 are extremely populated so it is impossible that bahria town may collapse.Its all my opinion…

[ihsanmarwat (Prop Guide)]

Your points are very valid saadi sb.

Dear sinful: i don't think that prices in b-17 have gotten standstill. I purchased two plots in b-17 and sold both of them within a month on profit. Then again i purchased two plots in b-17, now i am getting offers for both plots on profit but not selling.

Regards,

[qb-uk (Sheikh Abdul A)]

The question is how long will this artificial spike last for especially when law and order is messed up. Crime rate is high. Bombings galore. Constant problems with electricity. New gov plans have not been executed just yet so don’t know what to expect. I think similar to what happened when zardari was in power will happen here also. Prices will rise now until about 6 months or so, once everything gets alittle worser, the general public will lose faith in the new gov and prices will start to decline.

[hamidjan (Zain Hamid)]

Lets see for how much time it last. I think best is to make some judgments before investing and consider some important points before making any investment decision.

1. Do not invest in files , only invest in Physical Plots where possession is ready and available for constructing home.

2. Only invest with developers having good repute eg Bahria, DHA, MPCHS , JKCHS etc

3. Remain our selves liquid , Do not make panic investment.

4. Only invest in the projects where we have the Holding Power i,e Enough cash resources to retain the plot.

5. Divide Our Personal Portfolio in a systematic manner. Do not Put our all eggs in a single basket.

6. Do not invest in Big Plots having low Resale. Small plots have many organic customers or real customers who wish to buy plots and construct home . So a large scale of genuine buyers do exists for Small plots . Its better to invest in Small plots rather than Big Ones.

These are the Precautions which we need to make today's circumstances when real state market is stable or increasing. These strategies will change with the change of circumstances