As i was seeing today’s news at geo tv…Property rates have dropped down to 20% in karachi due to govt legislation’s after budget…Will it also effect the property rates in lahore as well???
Market is slow in Islamabad and Karachi. Lahore it is still strong for now.
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Wadda Saeen, You are great.
So far the rates are stable in Lahore
I had a detailed discussion with a leading dealer of Bahria Enclave today. Asked him about the market response to the taxes and if they are resulting in a sell off. His response was that the number of sellers in the market are quite normal, nothing unusual. However he did admit that the number of buyers seems to have dropped off. This was particularly noticeable because usually after Eid, number of buyers tends to increase specially with many overseas people trying to cut deals before they return. He said if the situation persists, some price correction would occur.
I would like to add a footnote to this discussion. The dynamics of BE may not represent the general sentiment of the market of Islamabad. This is because over the last 3-4 months before Ramzan, day trading and plot flipping had made a comeback in Bahria Enclave which had suddenly lifted prices by up to 20% in some cases. It was most noticeable in trading of files and small plots. Many Enclave experts have been warning anyway, that prices had gone up too fast and whenever that happens in any bahria project, it is a signal to become cautious.
Thanks raza for such a detailed reply.
Raza, I would take this report with a pinch of salt. Realtors have vested interests to give you glad tiding. BE is stagnant, though development and construction is fast paced but trading has been slow. BE2 files is another matter, that is heated due to increased merger activity. File prices are going to stay at 7 lakh, I reckon.
Isloo it seems you misunderstood the message in my post. The dealer is not giving any glad tidings, in fact between the lines he is admitting that if the present situation continues, it will lead to a correction. Even if the number of sellers remain unchanged, a drop in number of buyers clearly points to some imbalance in supply and demand.
Regarding your assessment of recent BE performance, I would respectfully disagree. Only five months ago, a top location 8 marla plot in N block was available for 36-37 lakhs. I tried to clinch a deal but due to some reasons it couldn't materialize. Today, that same plot is being sold at an asking price of 47 lakhs! An 8 marla in J block which was easily available for 27-28 lakhs is now trading at 33-35 lakhs. The jump has taken place because dealers had restarted the flipping game in BE, mainly involving small plots and files, which was constantly pushing up prices. We may now enter a period of cooling off as it seems some big investors playing the market have withdrawn.
Raza, so we both agree that BE will perform on demand from genuine buyers who would want to build a house. And this would be directly proportional to pace of development, utilities, services and overall living conditions. Speculative trading would die off as the big fishes will flee taking their black money elsewhere.
Regarding your missing the boat in N and J blocks, if those are ready for possession then less likely to come down.
New tax measures create uncertainty in property market.
Regards
This tax issue will eventually be overcome, its just a matter of time. What the market really needs is a power tonic in the form of maybe some new infrastructure development e.g. Margalla Avenue etc. As soon as any such news comes out, the market will jump right back into action, even though its impact may be limited to certain areas directly benefitting from such developments. Until then, its going to be a dull period.