What could be the affect on property prices as government decided to cut the interest rate to 7% which the lowest in last 42 years.
Prices will surely come down
Khan sahab tun ta nahi hoo,hw can prices come down,when their is no temptation to invest in national savings.banks
Yaara Adnan,
Hum kiya poora qoum hi tun ha Khoocha (: (:
after 691 posts and senior Authority we should be able to answer and guide the people with patience... Even when they ask silly questions....any how,
I think prices will come down due to slower market demand.The low interest and inflation rates would entail robust investment in the country in the coming time and people will start taking loans and business will flourish ,of course strong business opportunities in other sectors will affect the property price.
Definitely lower interest rate not only impact on bank deposits also impact on property sector
Where this all money comes from in property sector ? Definitely thorough banks not sudden but at the end of this year things will change up in property sector no more jumps in property.
People will b attract to invest in small business rather than property bec there is no option left but to invest small businesses
You will c in coming months like CNG PUMPS property dealers shops get decline in most areas bec they will find no more profits and margins
Bhai log yeh chain effect hai aay sa hona he tha property boom nay boht tabhi kee hai pakistan ka rupess 103rs dollar paar a geya hai. Aab aur tabahi ki gunjaish nai raee. Goverment is taking good steps
Property main jo paisa laganay wallay do number log hain aab woh paisa pakistan say nikaal rayin hain genuine buyer to 10% percent say b kaam hai saab dealers hain
Interest on savings are different and lower than interest on loans from bank as this is how they generate their income. So this 7% must be savings as banks are not stupid to lower their interest rates on loans unless they have a reason for it like foreign investments probably. And also commercial banks have no incentive and interest in giving loans for small businesses as they would make more by speculative activities like investing in stock market, govt. Bonds or real estate etc.
In short this has no major concern with real estate rise or decline to any extent
I think now there is quiet a sense in Pakistani investor.Not every one can do business so option in property investment will remain there.
There may not be a boom but steady increase in prices will be there especially those properties where proper development work is being done and not those which are waiting for miracles etc to boost the prices.
Lower interest rates means low return on saving and bank deposits. This means ppl and banks will have surplus money available which is probably go in 1. Stocks, 2. Property and 3. Business Ventures.
So yes the property prices are bound to increase after this slash in interest rates. I feel market will pick up after budget and during ramzan leading up to Eid.
It will be the market forces which will act and not the housing societies specially in the already developed areas like DHA, CDA, Bahria and other small societies..
Lower interest rate will increase business opportunities, Real estate will also get some share,
i had some amount in my saving account, for getting constant returns, but now its not enough for me , i have to invest it real estate too.
I have few things to share with you guys
why property price increased so much in Pakistan during last 10 years ?
first question u will ask that in Pakistan economic conditions are bad for decades than how come property prices increased so much that average house in Islamabad of 5 Marla cost u 1.50 crore (newly built) if you convert to dollar it will b around 1 lac 50 hazar dollars.
if you analyze u will realize this is all due to corruption big looters(magar-mach) money injected into property sector they made lots of money and huge profit margins and smuggled all margins and original profits to foreign countries.
That is the reason now dollar is at 103rs and we used think that our property value increased so much but actually if some one bought property when dollar was at 60rs and sold property when dollar is at 103rs gained nothing :)
This is what we called fake property boom and all original money invested by property investors is already not in-country which is why dollar is at 103rs
Agar currency ka rate same ray aur property price increase ho to us genuine property increase kehtain hai.