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Investor
( 161 posts )

[374 Replies]
Pakistani rupee value is doing a nose dive and currency value has depreciated 30% compared to british pounds since 2017.

I bought 2 plots back in 2015 in bahria town. Even though the price of plots have gone up by 10% each year, the value of currency however depreciated and the investment is completely worthless.

Anyone seeing anything positive coming out of pakistan's economy in the next few years?

    197 days ago In Where to Buy
    Post Answer
    Hamad Raza
    (15 posts)
    Dear Sirs,



    This is a very healthy and positive debate on the current real estate market situation for investors. Abdul Qayyum Sb brought a good point; it will take years to reach break even point in the market there is a wide gap between demand and supply which is very true. My question is if current market price levels of Islamabad property are realistic? Is it in the range of common Pakistani people who are earning in Pakistan. I am an overseas Pakistani and find is very difficult to buy a small old house of 25x50 in for example G sector of Islamabad? Main players in the property market in my understanding are overseas Pakistanis and black money if both are not able to afford for different reasons how come the property prices will still appreciate?
      162 days ago 

      Imtiaz
      (913 posts)
      Interesting point Hamad!

      My perception on this as below. Again these are personal views.

      Black Money as one of the main players in Pakistani Real Estate Market is a strong enough theory but it lacks a substantial evidence as to what extent. There is no doubt about its role, however, magnitude is not quantifiable. Previous Govt. did offered incentives to bring in the money with some predefined taxes to make it white but that is still to be reflected with its injection in the real estate.

      Supply and Demand is the main reason that makes the real estate to flourish, even if there are hiccups along the path. 'Supply-Demand' at times may sound an overstatement but its a fact too. The reason for growth in coming years.

      - The Rise of the Small Players: F, G, I Sectors, BT, DHA etc. developed parts represent a concentrated market with more end buyers settling down or rental yields rather than high gains. However, in recent years the emergence of low cost societies has proven to be a success. For example in ISB CBR-2, ICHS, etc. where you can get a file/plot in about 2 lac/marla has introduced a new model of small investment with healthy growth/demand. Similarly in Lahore, Al-Kabir Town has gained good reputation and growth.

      Fact 1: Low Cost societies are on a rise compared to some big names. These low cost societies may not have same media/marketing coverage but people trading in them have made decent revenues and have attained fair enough growth appreciation (doubling in few cases in last 2 years). As per my knowledge, talking about the emerging ISB market some underdogs like CBR-2, ICHS are doing better than Media dominant Capital Smart City, Taj Residencia, Park View etc.

      Diversity of Real Estate Inventory: Both ISB and RWP are growing beyond their traditional boundaries, i.e., Fateh Jhang, Chakri etc. with decent options on low investment. People with fancy real estates offices in Blue Area etc. on %age wise may be making less than those small site offices in those emerging locations.

      Fact 2: Cities expanding beyond the developed areas have lime lighted societies that may be a bit far (as of now) from mainstream city but they represent a good future and growth.

      Size of the Property: Previously 25 x 50 was about the lowest of the benchmarks for a plot/house. But now smaller plots of 2 - 3 Marla are more in demand that can sell quick and construction can be cheaper, overall.

      Fact 3: Small societies or open land with smaller dimensions of plots/constructed units are more in demand than the established ones that offer the traditional sizing of 5, 7, 10, 20 Marla etc.

      Having said that, Market is slow, now denial to that. Previously, I have tried to furnish some figures on the shortage of houses, people needing a roof on their head etc. on a thread (some thing on PM initiative for Housing) that more objectively reflected things in the context of projected growth and demands.
        162 days ago 

        Hamad Raza
        (15 posts)
        Thank you Imtiaz you have truly a deep insight of the property market and people like me benefit from your inputs at this forum. What is your advise under current scenario, if I have to invest about 10 million Rupees for three years from minimum risk and good capital appreciation point of view; what are the best options in Rawalpindi and Islamabad ? Once again thanks very much for your en lighted input.
          161 days ago 

          Raza
          (1 post)
          "...However for local Pakistanis this is not an issue since foreign currency does not have impact for local people."



          Well explainer by Mr. Imtiaz already but it is very naive of local Pakistanis to think that locals are not hit by currency devaluation, when our export levels bare minimum vs. China, which in comparison is completely incorrect or even India, as their export volumes are massive (1 to 1000+). So Pak has long way to go to catch up full export potential and with security and investment hurdles, bad FBR policies/system, it will not be easy. But need a stable, educated and serious Govt. To turn things around and that too may take several years. Not in my lifetime I guess.
            160 days ago 

            Abdul Qayyum
            (1809 posts)
            Raza Sb.

            I do not think it could not be done in life time!
            In fact if govt play honest, in 5 years, wonders could be seen.
            -Cut lavish imports by maximum amount
            -Tax all shop in country which is in the market by Rs 1000 per year or even more (under self-declaration)
            -Tax all Muhalla shops in cities by Rs 500 each per year (under self-declaration)
            -Tax all village shops in the country by Rs 100 per year (under self-declaration)
            -All luxury cars must be stopped coming inside the country (this might save millions of $)
            -Talk to China about Pak export imbalance upfront, they are already giving to Bangla Desh, Sri Lanka and some other countries.
            - Bring tax evaders in the net and put them in jail of not paying. A very difficult task but govt can do that.
            - Pay honest attention on all department’s audit reports and rectify where possible.
            - Do not just punish the corrupt ones, keep them in jail, till they return the loot money to state.
            - Talk to all stake holders of business community and devise ways to improve exports as per their intake and relax rules for business.

            I am sure, this can make a torn around in 5 years.

              160 days ago 

              Hamad Raza
              (15 posts)
              All Valued Forum Experts Abdul Qayyum Sb, Imtiaz Sb, Nadeem Sb,



              Kindly advise an investment portfolio for me with reference to my above question.
                158 days ago 

                Imtiaz
                (913 posts)
                Hammad, as a personal preference, in order of priority

                The reasonable growth seem to be in the societies along the proposed ring road

                - I-16 (5 Marla) - approx 3.5 M
                - CBR-2 (10 Marla) - approx 2.5 M
                - Phase 8 (5 - 7 Marla) - 2.5 - 4.0 M
                - Gulberg Residencia (7 Marla) - 4.0 M
                - B-17 (5 - 7 Marla, E, F, G block)

                Under current circumstances, go only for the possession ones.

                * all figure above are approx.
                  158 days ago 

                  Imtiaz
                  (913 posts)
                  Rightly said AQ sb. However, as a matter of unfortunate fact, our state/country is mostly run by the bureaucracy, Ministry is a fancy public face that changes but the ugly truth of bureaucracy remains same. Pakistan is a country with one of the biggest chunk of tax that can be collected. However, FBR is a joke of an institute.

                  - It insists and urges people to File Tax Returns. Its not people responsibility to first pay the tax and then follow a complex documentation process to file it. It is the responsibility of the Revenue Collection Body to integrate the tax payments with National ID and return the tax files to the tax payers. FBR asking people to pay and than also file is as if one goes to a restaurant, pays service charges and than the restaurant asks that person to also clean the table, bring the food and than clean up the dishes... The biggest reason for low taxation is that FBR is incapable and corrupt. Examples:


                  - Recently they couldn't do anything regarding the tax defaulters but threatened to penalize late filers with a penalty of 20000 PKR.

                  - Taxing incoming mobiles with a ridiculous tax, that too in USDs. At one end the govt. says it plans to ditch the USD and on other hands asks people to pay in USD or its equivalent. Would the FBR guy be capable of intercepting a VVIP if he is carrying multiples mobiles? I dont think so. There must be a uniform mechanism.

                  - Any Pakistani citizen cannot name a single item ranging from first thing in the day (tooth paste) to last thing (green tea post dinner) that is not covered under the tax! Everyone pays, full tax on all the item used and what he/she gets at the end, not even the basic sense of security that allows one to hold even a mobile phone worth of few thousands in public. The commoner is paying all the tax it could with almost 0 incentives!

                  All that is needed is an active role of FBR. FBR is incompetent and it has an easy line of blame 'people dont pay tax', why would they to cover up your luxuries and corruption!
                    158 days ago 

                    PAKISTANI-1
                    (3019 posts)
                    Forget about the devaluation of Rupee and everything else. Please focus on the handsome looks of your Prime Minister. Congratulations!
                      158 days ago 

                      Abdul Qayyum
                      (1809 posts)
                      Imtiaz Sb.
                      Not a single word to readdress your narration.
                      We are kind of surrounded by a pitch dark tunnel of hopelessness and if any false signal show up at the other end, jump to believe on a way out.
                      I get myself mentally dispositioned when I think what happened to our nationwide talent pool!
                      Pakistan used to be self-sufficient in great planners, foreign service warriors and top rated talented professionals in civil service.
                      These people made wonders in planning, in aviation, in legislations, in infrastructure and in all facets of life?
                      Allah gharut kare inn nepotism waloun ko. They completely destroyed our country for their lust and greed.
                      No hope, mate!

                      Allah Pakistan ka “Qaht ur rijaal” door furmae…Aameen
                        158 days ago 

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