Salam everyone, hope you all are well, i know it’s not appropriate to discuss about property while the whole world suffers, so please forgive me in advance
Do you guys think that this catastrophe can literally crash the pakistan property prices, and if yes to what extent ? Who is better off now, those who just sold and have liquid cash or those who have assets like plots and files ?
What about construction business, prices of material, labour costs etc ?
I think the prices would remain struck but no major crash on possession properties.
The under development project may suffer the delays as the materials would not be supplied as they were in the past due to border closure and shipping restrictions.
It depends on the Duration (for how long) & Magnitude (for how much, i.e., economic/social cost). If that prolongs that for sure has global consequence. However, in PAK that mostly depends on the following 2:
1. Petro prices crashed, while USD and Gold gone up: Double Edged Sword
For countries like PAK, where import bill will significantly decrease due to petro, however debt servicing will increase due to PKR drop against USD.
2. To Make best out of 1, Growth needs to escalate:
World has dropped interest rate to 0 and here its 12.5. No business and economy grows at that monster of a rate. In PAK biggest borrower from banks is Govt. itself.
So you can see, just two example above in which direction the world is moving and where our economic direction is heading...
Its a confused economic policy, blood bath and no one sure what will happen. However, till budget proceedings will be slow across the sectors.
Re: Real Estate - Escalating Dollar may encourage overseas to buy post budget (after Jun). I dont see much visible impact, however, these are strange time and in keeping in view 1, 2 above, as confuse the reality is, more confused the predictions will be...
It depends on the Duration (for how long) & Magnitude (for how much, i.e., economic/social cost). If that prolongs that for sure has global consequence. However, in PAK that mostly depends on the following 2:
1. Petro prices crashed, while USD and Gold gone up: Double Edged Sword
For countries like PAK, where import bill will significantly decrease due to petro, however debt servicing will increase due to PKR drop against USD.
2. To Make best out of 1, Growth needs to escalate:
World has dropped interest rate to 0 and here its 12.5. No business and economy grows at that monster of a rate. In PAK biggest borrower from banks is Govt. itself.
So you can see, just two example above in which direction the world is moving and where our economic direction is heading...
Its a confused economic policy, blood bath and no one sure what will happen. However, till budget proceedings will be slow across the sectors.
Re: Real Estate - Escalating Dollar may encourage overseas to buy post budget (after Jun). I dont see much visible impact, however, these are strange time and in keeping in view 1, 2 above, as confuse the reality is, more confused the predictions will be...
Uncertainty is there, all across the world. Most of the business in every field is being effected negatively except the medical supplies related to corona prevention. Sure it will effect negatively on Pakistan’s real estate also. But how much, can’t be predicted right now. Let’s pray altogether to ALMIGHTY ALLAH KAREEM for the safety, health and betterment for every body AAMEEN.
@Imtiaz and everyone else,
Thank you and yes I agree, no one knows what’s is going to happen as it depends on so much factors,
@ Zubair ameen sir
People lost millions in stocks and buying gold now.
In Pakistan businesses are badly affected and we do not know how long this pandemic gone stay!
Ultimately refuge seems to be property.
In BT phase 8, my office invested in one Kanal residential in very recent time and we sold last week with handsome profit. There are places in phase 8 where a 10 marla costs above 1 crore!
Some locations may be stagnant of course but real estate investment now should not be bad in the developed areas.
Welcome AQ sb, good to see you!
In uncertain times, there is only 1 king: CASH
Thanks Imtiaz sb.
Right no 1 king is cash for the time being but being stacked in pillows and lockers.
How long it will be hidden, sir?
Heavy populated countries have self generating economy. Cash has to go in some kind of bzness and that kind is property amid turmoil in Pakistan.
I will go ahead and say construction business is mostly lucrative and much better than $.
My personal experience is proving loud n clear, Alhamdolillah.
Sir, with due respect Cash is not only about being stacked in pillows or frozen in accounts. The very nature of Cash is the liquidity, i.e., to go with that Cash to Gold, USD, Stocks or Estates... Whichever on the rise
While Estates have the potential but not as lucrative as it used to be. With new taxes and slow down, its not as easy to liquidate and invest where growth is... There may be profits here and there but thats not a nationwide trend!
Just See Cash Investments in USD, Gold vs Cash in Real Estate in last 2 years, the equation is absolute clear!
Example: USD is the cash itself but you can see one of the most appreciating entity when compared to PKR.
I 100% agree with Imtiaz, a blind person can see, where Pak rupee is going. Just check our 4 months back post, when some of us were saying, $ will go strong and some youthiya were saying that good time is coming. ;)
Rupee will further drop. 1.5 B$ taken out of Pakistan by foreigners. Real state will further drop. Keep ur money in $ or Gold. Wait for further 2 years to purchase plot or be ready for loss.
I hope that some good should come out of this worse crisis as far as the property prices are concerned
Our prices are too high, they should come down significantly after this crisis
By too early to predict, they might go up even further
Gentlemen told you so long ago, and more recently reitered that again: with current economic policy & SB's pursuance of hot money, PKR among weakest currency and any asset that yield PKR returns will suffer massive in months and years to come.
It's not the pendamic thing only, it has to do with our economic structure against universal financial system (USD based). Now it's Pendamic, next will be our budget deficit, then will debts servicing, then increased imports, etc. etc. this cycle to hit PKR will continue one way or the other until this broken model is fixed to which this system, state, and it's puppets are completely spineless...
Bottom line:
- If you have under X million for 'Investment' only in real estate, don't do it. USD or USD pegged currencies are the way to go. Stocks are suffocating too and these morons are still pursuing > 10% interest rate where world has almost made it 0% atleast for now.
- If you want to 'Buy' for personal living or rent this is your time to do so.
Feel free to save the above somewhere and of-course you can thank me later. :)
@Imtiaz
What are investment options in Dollar, easily available in Pakistan?
One way is to convert PKR to USD and wait but is there any investment option where payment & return is in dollars?
This spineless moron suffering from NPD can not think beyond his nose is going to drown us all. It is not pandemic emergency, it is psychological disorder and our desi submissive mentality that is hurting us all.
All other nations will stand up and come out of it in months, while we will contine to hear same old "tota kahani".
Property and construction industry is intentionally strangulated, exports destroyed with high tariff on imported raw material and industry crushed with high interest rate. Their moronic strategy to attract foreign investors with high interest rate has backfired and rupee and economy both are in deep hole.
Our problem is not just coronavirus but a mental disorder that some of us are feeding with our conviction.
Hi Imtiaz, don’t you think buying usd by everyone would totally destroy the Pakistani rupee ?
Best thing should be that property prices sort of crash or come down significantly and people invest easily for their future homes.
I have heard even the gold in hard to buy these days.
On an optimistic note, I think "hot money" failure will make our feds rethink their strategy. So when the pandemic dust settle, I see things going towards more positive and sustainable side including support to housing/construction and export-oriented industry and reduction in policy rate that will trigger business activity.
So let's keep looking for some light at the end of the tunnel.
-- USD vs PKR Real Estate:
This best applies to overseas with cash available in USD or pegged currencies (SAR, AED, etc.) for them to reserve that in foreign cash at-least for an year or post budget is best. PKR immediate devaluation (till budget) in inevitable, even if not, real estate prices will be stuck. For investment purposes only, less than 2 years bracket for real estate doesn't sound promising, USD does!
-- PKR to USD Conversion:
Banks, Open Markets etc. could be channel to buy but could be expensive. Alternate can be these bonds/certificates 'Pakistan Banao Certificates' that yield returns both in USD & PKR but I guess there is interest factor involved and their yield is also debatable.
-- USD Investment vs Hoarding
USD investment is all OK, as far as bought through proper channel and kept in USD account. Hoarding USDs and sending them out hits PKR more not USD accounts within PAK. But this is investment, sometimes even legally when you attain financial protection for you and family, you may not be serving the state (ideally). Keeping USD in accounts actually helps state, thats what USD bonds and certificates issues by Govts. do. Its when the USD start to climb due to external factors, your investment grows and is cash-able at immediate instance of need.
-- Real Estate purchasing as End Buyer
This is the right time or just before the budget may be even better, if one wants to buy as end buyer, can hold that for 2+ years at min or want to get rental returns as monthly incomes.
-- Impact of Chasing Hot Money on Economy & Currency
Two IMF men at the core Fin. Minister (Economy) & State Bank Govr. (Currency). What Asad Umer couldnt do, was forced out to bring these men who got that IMF deal in weeks. They are with a task at hand, i.e., to try to generate quick paybacks to IMF and in this Egyptian Model of IMF Package, Hot Money seems easier way out without considering long term impacts on economy. The pursuit for Hot Money will exhaust the already broken economic model of this nation. You will see, at-least basic example:
- Increasing Power Tarrifs,
- Inflation,
- Austerity with decreased growth
- Free float Currency
all these happening simultaneously since we got into this IMF thing
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USD due to this Pendamic stimulus package by US Gov. has escalated aggressively. USD Gov. need to borrow more bucks from banks. It may come down a bit but in longer run with economies taking years to recover, USD will grow.
Simple Principle: When the Uncertainty Grows, so does the Green Back!
Seems I was right. Donkey King is going to announce incentive package to construction industry in an hour.
Another U-turn from the U-turn master. Though this time to the right direction. Short-term gimmickry lost, long-term sustainable growth strategy wins.
Laot key buddhu ghar ko aye.