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Hm, well for the past 5 years property has not been a good investment generally speaking but for the the past 10-15 years it has been good so no one can predict the future! but for the current situation it does not seem like property will be a good investment in the near future i.e. 2-3 years.
So what should be the smart move then? Stay with some liquid cash investment in the form of any savings account for the time being and to observe Pakistan real estate? Waiting for it to start inflating again?
Well in my opinion the smart move for the near future (close to 1 year) would be keep your savings in foreign currency esp. US$ and see what happens I mean where the economy and the real estate sector is going then make your move accordingly right now is a very bad time to invest! As property prices in majority of areas may FALL directly or indirectly via the fall of the rupee!
Well this might be a short term strategy, or to save your money from being further affected by inflation. What will be the solution if the picture regarding the real estate remain unchanged in the course of two to three years? (as it seems to be)
I have these options in my mind if we talk about 5 to 7 years strategy.
1. Gold Bars
2. Foreign Currency (although it will not be considered as a profit return investment in the long run)
3. Some PKR Saving account or any Shares etc(Although Risk Factors are involved at higher rate in shares)
Need some valuable comments from brothers on this forum.
As an advice for you brother Shoaib, i read over and over again advices to deposit savings in bank accounts to earn interest. Keep in mind that Allah has declared war against the users of Riba (interest)! Dont risk your akhirah for gains of this dunya.
Re. the investment, I have been in the same situation as you. My research suggested a diversification of my investment is the best option. I invested in a commercial shop at the early stages of construction of that shopping centre (Alhamdulillah the shop has been paying rent for the past 3 years and also appreciated its capital value). I bought some some blocks of land in a new estate in Rawalpindi and the value has only moved up enough to keep in line with inflation. All in all I am still at a positive return in my investment.
Shares (I am within the funds management industry) are at a critical time due to the Euro zone political issues and could be hammered if Greece leaves the euro zone. Gold at the same time looks over priced due to all the purchase by frustrated investors sick of the stock market drops. Any stabilizing in the stock markets will see gold take a short term dip.
I would suggest 30% commercial property, 30% residential investments, 20% shares, 20% gold. You will not see your investment return 50% or so in a week, at the same time it is highly unlikely you will see it drop as well if diversified across asset classes.
So long as this government is in power I would avoid further investment. This government seems in only interested in stealing peoples money and pushing Pakistan back at the behest of its paymasters in Delhi and Washington. Rupee is expected to further depreciate as they have taken out loans from IMF, looted the money and now it is time for the people to pay back those loans but there is no money in the kitty...so they will have to print more paper thereby devaluing its value further. Our enemies are destroying us from within.
You are Right that Keeping your Savings in a PKR savings account is a foolish task, in religious terms & it will not give you any meaningful financial benefit as well, because inflation in Pakistan is going at a much higher rate than the interest rate they will offer you. So by doing this you will still be losing your money...
You are right, Chances for the rupee to get further devaluated are very much there, as long as this govt remain there. Now since past few days there is 15 to 18 hours power shortage in the larger cities. They completely failed to provide people with the basic necessities of life during their whole tenure
Shoaib bhai. Aap ney ghar to banvana hi hei - hena? Then it is very advisable to invest in one plot or two plots so that you can make a house by selling one of them and building on the other when you return. But invest in non-developed area. In 6-7 years it will be more than double in real terms (i mean after factoring in inflation and rupee devaluation) inshaAllah - unless there is a major catastrophe in Pakistan...and I hope not.
But even if you want to live in Lahore, don't buy there. Buy your plots in Islamabad non developed sectors like B-17; G-14; F-16 etc.... this is because the price of property in Islamabad rises much faster than Lahore.
When you come back to Pakistan and decide to live in Lahore, you can sell your plots in Islamabad and buy prime Lahore residential property and make your house inshaAllah.
I am advising you what I have been doing. I am in the Gulf for the last 6 years, and I have invest most of my savings so far in property in Pakistan. in the last three years even during property slump, my property value has risen much higher than inflation and rupee devaluation.