Why property prices suddenly went down? And when its revival expected?
Supply is more than demand.... Simple...
BE-2 and BTK have taken Billions of Rs from market....
FT, Multi Orchard, residencia, Flower Valley, Gulburg, Bahria Town Phase 7 and Phase 8 (latest boom), DHA Valley (latest boom, Ghouri Town (latest boom) etc have also taken their due shares from market...
It will take some time for increase again...
Regards
But the situation is very bad and why Bahria did this ? property dealers are evacuating offices in bahria town phase 7 Prisim Arcade is almost vaccant.
Allah reham karega… This is part of game…
Adding more to what Guru ji said
During PMLN era business will flourish more than property. During PPP none of business was working and everyone invested money in property.
There was an artificial boom, so the bubble blown. But even now if you contact any dealer in market he’ll create another boom in few minutes, so enjoy talking to them and learn the art of lying.
True Apple…
I don't think that the property bubble popped; its more likely a correction, which our real estate sector truly needs.
If there wouldnt be a correction right now then we can say that in future the property bubble may pop. It is our strange behaviour that we keep on making millions by investing in real estate but the moment we see any price correction we start whining.
Rest ALLAH knows better.
Atleast there is no price decline in reputable societies in Lahore. I think under developed societies of rawalpindi/ Islamabad hit the most.
There are four kinds of property investments:
= Type(1) (SOLID STUFF) Schemes that are on-the-ground where prices stand on solid ground with mostly genuine house makers, some investors but no speculators (for example - Sectors G-13 and G-14/4, DHA-Islamabad phases 1 and 2, JKCHS Zone 2, Bahria main possession phases, Cabinet society, DHA Lahore Phase 6 etc.).
= Type(2) (COMBO) Schemes that are combination of completed development or near complete development where you have a few genuine house makers, a few speculators and mostly long-term investors (for example Multi B-17 (Blocks A,B&C), Multi Orchard (Blocks A,B&C) Mumtaz City, PECHS, Bahria Enclave 1, DHA Lahore Phases 7 and 8 etc.)
= Type(3) (UNCERTAIN) Schemes where possession is uncertain and there are mostly short term speculators (for example BTK, BE-2, DHA Valley, Multi B-17 E-block, Top City, Faisal Town, Multi Orchards D Block, DHA Lahore Phase 9 etc.).
= Type(4)(TOTAL JUA) Schemes where there is no map and almost no location (For example DHA Multan, Multi B-17 F-Block, Multi residencia without map, Faisal Town Phase 2, DHA Lahore Phase 10 etc).
So in difficult times for property (due to law and order, political crises, continuing economic difficulty, Strong rupee fearing a dollar resurgence), this is what has happened:
SOLID STUFF schemes are on a standstill with very little downward adjustment;
COMBO schemes have already experienced big correction;
UNCERTAIN schemes are proving dulldull (quicksand) for investor money;
TOTAL JUA schemes have got seasoned gamblers and these gamblers have the guts to hold their positions and wait for next monsoon season and are praying for rainfall (which if it happens will make flowers bloom in the desert).
This is what i have mentioned few weeks ago... That property prices are generally overly priced (except for some solid on-ground schemes) and especially with the recent (around 10%) appreciation of PKR it should inevitably be corrected, or otherwise sale and purchase of properties will generally be slowed down to a point that it will make prices stagnant...
And that's exactly what is happening now. :)
@Pk1: An excellent enclosure of the current RE market status.
What are your views about sustainably depressed DHA 2 Ext market and improved prices in Gulberg residencia?
PK1, you are an exceptional expert with remarkably good analytical skills. Thank you for the great analysis!!
Thank you sir for your kind words. Zara-nawazi hey aap ki.
So I think the people who have gained and are still gaining are Solid Stuff investors.
Even if it seems that the price of their plot is constant, actually the dollar value of the property has increased. If they bought a plot for 1 crore in JKCHS or DHAI-Phase 2 in last quarter of 2013 and price is the same, they have still gained a profit because now you can get more dollars in exchange for the same 1 crore rupees!
Similarly, if you bought 1 kanal plot in Cabinet for Rs 32 lacs in mid 2013 and now the price is Rs 40 lacs, you have made a very good profit even though it does not seem remarkable. In fact it is not just rs 8 lacs, it is also the more dollars you can get from this 8 lacs.
Good analyses PK 1 your take on bro zubair question?
Dear PK1, good analysis on foreign currency, one question, do you think its realized gain? I think its short term move in foreign currency and must not be considered as opportunity cost. Dil ke behlane ko kheyal acha hai. Do you know Dollar got weak rather PKR please check INR graph in the same period. Dollar shall gain its ground again soon.
Lower dollar rate means lower remittance to Pakistan by overseas residents, less funds to invest in Pakistan. People who bought property in 2013 can’t realize the gain as they can’t sell that.
PK-1
Good analysis,but dollar does not have any link with PK property.All property deals in Pakistan occur in Pak rupee not in Dollars.The price of Petrol/Diesel,Exports of Goods can be effect with Dollar but not real estate business in pakistan.
Property Market in Pakistan is mostly based on speculations. Lots of IFs and BUTs (Margalla Avenue and Tarnol Flyover speculations are mostly discussed here).
The big players mostly dont rely on SOLID STUFF, by the way let me explain the BIG PLAYERS here.
Big Players are not the genuine buyers, they are the heavy investors and want value of their money being quickly boost up. They have the NOS fitted engines with High Octane filled tanks. They want a drag race not a desert rally.
So the SOLID STUFF is not any worth for those drag racers !
That is only good for those "Who usually enter at the end of the show with very expensive ticket".
Usually those are the Genuine Buyers who want to build their homes at the end of their career normally, when they are going to RETIRE !
UNCERTAIN and the JUA Schemes claimed here are actually for the Drag Racers. Those who have enough balls to take calculated RISK. These are the players who risk for the movie ticket and watch the complete show OR quite the show if its boring !!
The players claimed here for the SOLID STUFF guys usually waits outside and have this kinda stance "yar mai keh raha hon movie bakwas hogi, its a total waist of time, dont go IN, bla bla bla " BUT on the other hand keeping an aye on whats going on and relying on the ones that are quiting the show for whatever reasons and telling again to other guys "Dekha mai nay kaha tha na movie bakwas ho gi, its a waist of time and bla bla" BUT again still they are keeping an eye on the guys coming out of the show and when they believe that "Yar hamay bhi dekh hi laini chahiye" its been too late and almost the INTERMISSION has been passed.
Cheers
Ahmed Tanoli
At least half the money invested in the RE sector of Pakistan belongs to overseas Pakistanis. To them dollar price matters a lot. I agree with Pk1 in his analysis of investment value appreciation for people already invested in Pakistani RE market. For example people were buying dollar at 107 and investing in pakistan and even without any movement in the RE market their value has increased by 9.1% (107 to 98 Rs/$).
The recent decline in dollar rate and it's uncertainty is also an other factor for a RE market slowdown in Pakistan since overseas investors are holding their monies from converting at a lower rate. Once dollar goes up; you will starting seeing the RE market go up with it.
Guys can anyone please help me understand what is happening in DHA Ext and Gulberg residencia in light of Pk1's analysis?
@PK1
Nice analysis. I also noticed one more Factor which can be considered and that is "TIME"
Because most of the Solid Investment(Type 1) described by PK1 are the societies which were launched long time ago about 6+ years
Most of the COMBO(Type 2) and UNCERTAIN(Type 3) were launched about 4+ years ago
Whereas most of the Total JUA(Type 4) are fairly new launched societies.
Waqas