What are the main,basic and factual reasons behind dead market of real estate in islamabad?
Dear Usman Nawaz,
Behind crisis in real estate over supply and less demand.
Rhai she kasar Multi B-17,Bahra Enclave2,Phase8 ext,Dha valley na poori kar de.
Regards
Factors in the order of severity:
Wholesale plunder in BE-2
Migration from troubled KP, FATA, Balochistan and Karachi stabilized and likely to reverse.
New tax laws and blockade of black money flow into property.
Dubai property rise in 2014
Malik Riaz on the grill.
Short-term investors pulling out due to decline.
Agree with Isloo.
Many investors from KP have moved back, Malik Riaz is busy fixing the Vally, Taxes have made real estate investment an even more expensive deal...
Investors often like to play when everyone else does.
I agree with Samra baji.
But the biggest reason behind a stagnant property market is the relative stability of the Pak Rupee. Whenever there is free fall in rupee value against the dollar, people rush to property to save their savings from erosion in value. On the basis of economic fundamentals, rupee fall creates an inflationary pressure on all prices - because imports are more expensive in rupee terms and forex savings of overseas Pakistanis translate to more rupees and hence greater purchasing power.
But in real estate it has a tremendous snow ball effect as more and more people rush to real estate. This creates not only a safe haven for funds but it also presents a profit-taking opportunity for savings. So more and more people run to climb the bandwagon. Sometimes there is even an avalanche.
But personally, I never wish for rupee erosion so that this may increase the value of my real estate investment. To the contrary, I always pray Pakistan and its currency get stronger and stronger inshaAllah even though I am an overseas Pakistani with savings in foreign exchange.
We should be Muslims and Pakistanis first, and then investor or anything else.
With due respect, i would disagree with following reasons:
New Tax Laws
Rupee stability
Malik riaz issue
Dubai property rise
If these are the real factors then it should have affected the Lahore property market as well but surprisingly property prices in Lahore are increasing continuously. What i believe is "nexus" of investors have kept Pindi market slow deliberately & they can lift the market whenever they have bought plots/files at lowest possible prices from desperate sellers.
While interest on saving accounts is worst ,and at the same time no industrial or other business type growth in the country, its simply a surprise to see real estate doomed phenomenon here.
YES isloo points coupled with nadeem bhai are making sense , BUT I THINK PPL in general have lost trust and hope in certain brands , that's the cause of decline over here in twin cities , otherwise some really fantastic and astonishing success stories like that of DHA in twin cities and also some cda sectors makes it irrelevant to generalize the real estate decline.
Well there are still genuine buyers in market of Islamabad for sale/purchase in houses of CDA sectors, Bahria and DHA but ratio is low.
Most of the short term investors left the real estate market of Islamabad and i think they returned to Lahore and Karachi markets.
I humbly disagree with Isloo, Samra and Pardesi. As rightly pointed out by others here, if these factors were the main reason, then that property price decline/stagnation would have also been witnessed in other cities Like Karachi or Lahore.
Karachi prices during the same period has been increasing every month since last 5 years. In last year alone (2015), prices of some areas like Gulistan e Johar, PECHS, Gulshan e Iqbal doubled from their level in 2014 while growth in all areas of DHA CLifton was more than 50%. That's just in one year.
As rightly pointed out by Nadeem Ahmed, the reason for stagnation is Islamabad property is Demand/Supply. This is the same factor due to which Karachi prices are jumping since last 5 years (No supply vs increasing demand)
Agree with Isloo sb, Nadeem Bahi and Pardasi sb,
The bubble for Islamabad is already full and their is hardly room for growth in the existing populated areas. Nadeem bahi wrote "Behind crisis in real estate over supply and less demand. Rhai she kasar Multi B-17,Bahra Enclave2,Phase8 ext,Dha valley na poori kar de"
Lahore market has room to grow due to the population so bubble is still some what empty. In Islamabad, DHA and Bahria has competition with other societies like CDA, Multi, gulberg.
I don't consider Islamabad property in crisis but the bubble is full. It may burst any time or may increase value further as Pardesi sb highlighted a very important factors. Devaluation of currency is around the corner as government is ready to take further loans to meet the budget for next year. This will further make the $$ strong.
Just to clarify, people are still leaving KP/FATA and migrating to Islamabad or Lahore etc. The ones who have migrated will not go back as society of KP/FATA has been ruined a lot and it will take decades to fix it.
I personally feel that oversupply of projects in Pindi, Islamabad has made the prices stable and no considerable increase with very few exceptions.
Regard
I dont know many reasons about islambad property stagnation. But i think following are the reasons for lahore property prices increase:
Construction of ring road news on southern side which has great impact on southern side socities those were considered away from city
Construction of orange line train project
CM has given 8 arab ruppees within 2 weeks to those who are affected due to their houses under orange line train. Most of them were residing on multan toad and after getting money they are moving towards southern side socities.
Lay off from gulf countries due to low oil prices and people coming back and have nothing to do so they are constructing their house as they believe the6 have free time available.
Last point is more generic. These are what i think. Others may disagree.
Since when is stability in the real estate market a ‘crisis’?
This is funny. There is no bubble of any sort. Demand/Supply may be one factor but mismanagement is a key issue by most societies due to which there is no growth, however, those areas where development is going on are indeed growing.
With growing infrastructure and developmental work around Isb/Pndi will drive prices further as it will attract more ppl towards the capital
I think Arshad is right. Mismanagement has been a key factor in Pindi/Islamabad. DHA & MR always thought that they would always be able to fool the inventors on mere “Hope” but to their bad luck, Gen. Raheel appeared on the horizon and changed the game. Bahria town is only undergoing through correction and adjusting to the realistic prices.
We cannot generalize the societies in the twin cities as some are down on the mismanagement, such as Gulberg and some are up due to the good development pace, such as DHA valley now.
A 7 Marla plot in BT safari valley at 30 lacs is quite realistic. The problem is that people are still dreaming to double their investment like they used to do in BT in the past.
The smart ones knew MR will take BT phase-8 & Enclave money to Karachi and they invested in bulk there, leaving the ordinary RWP investor in chaos.
I bet if Gulberg becomes straight, DHA develops DHA-3 in the real sense, DHA valley get the same pace after Gen. Raheel, the prices will shoot in the twin cities making demand/supply phenomenon as void as buyers are still there. This area still needs houses on a gross scale!
Contrary to the popular belief, the fall of CDA sectors-17s and the likes must act as a catalyst to uplift the societies which are at good development and it has started happening.
Dha phase2 is unaffordable for common investor because of expensive.
Multi ior Bahria na apna atmad kho diya.
Bahria 1 to 8 is good for genuine buyers not for good return in near future.
Bahria phase8 ext,Enclave and valley is front of you where investors stuck and new investors are not ready to take any risk.
Multi is also become sister of Bahria after E-11.Start many extensions rather than develop old blocks.
Baki bachaa CDA sectors where no or poor development ior prices skyrocketed.
I know many investors who already moved to Karachi and Lahore market and feeling comfortable.
Regards
Yes and due to these non developments make zone 1 the king despite no maintenance. Atleast you can buy or construct a house there. If prices are sustaining their levels in CDA sectors even during correction phase these are the prices market has absorbed and so are not inflated, otherwise would have come down dramatically.