Dear all,
I want to know your opinion about the fact that after 1st july, only filers would be allowed to buy property valued in excess of 5 million pkr.
Do you think it will bring another recession in the real estate sector as property market is always sluggish before elections.
Yes, Finance Bill/Budget 2018-19 passed and from 1st July only Filer (who exist in Active Tax Payer List) can buy the property above 5 million PKRs.
It will bring biggest recession and crash in the real estate market. Effect of this law already started to appear and prices are going down day by day.
Real Example: I want to buy a 10 Marla Corner plot in Johar Town, G block 2 months ago but owner rejected my offer (Rs. 14.5 million) at that time but yesterday he called me and said that he is willing to sell now with 20% reduced price. His asking price at that time was 15.5 million and now asking price is just 13 million. But now i refused and said that i will wait for 2 months as market going to crash for luxury houses/properties.
Initial impact is going to be huge as FBR is not just sitting idle and waiting for people to react. Instead they are actively chasing all un-declared property. Soon FBR will have access to major societies' registration/transfer record and there will be no place to hide for tax evaders.
Rounding up 50 thousand suspects is just the beginning, read more:
https://profit.pakistantoday.com.pk/2018/05/22/property-titles-lead-fbr-identify-50000-tax-evaders/
But once everything is clean and white, property market will bounce back. Most probably in the later part of this year. But this time more for genuine reasons instead of speculative investment.
I think it will take sometime for the government to realize the true impact of the crash as transactions volume will become negligible as people with expensive properties have good holding power as well.
Let's see who comes in power and how much nerve they have to bear the consequences.
A crash in real estate sector will be good for economy.
If government discourage investments in to savings accounts and real estate then people will actually invest in small to medium size businesses which will create more economic activity and create more jobs for youth.
Construction business will always stay healthy because of genuine demand for houses. Only plot/file sector should crash so all the money parked move out of land mafia hands and start helping economy.
Trading of open file will increase in a result of situation.
Small plot buying/selling will increase on grass scale.
Person to person sale/ buyout will never increase more than 50 lacs on papers.
Bigger plots will get negative impact.
I am all for reduction in prices but in my opinion, partly agreeing with AQ sb and Junaid above, don't see significant impact on property prices, might effect low profile societies' transactions, big names might remain stable but might become slow...
If new rules get followed up and implemented religiously with clear mechanism of monitoring whole transactions then maybe we start going towards price crash, but again, logon kay paas itna Paysay hay kay lagta nahen hay price crash hu ga, Lot of people these days seem to have loads of money, just check around you and notice Cruisers, new corollas and civics, established businessmen, small and large alike, seem to be really rolling from last 5-6 years, so this might prevent huge price reductions,
The same old principle - Supply & Demand.
- Not much safe options for investment in Pakistan other than real estate (just buy and hold/construct). In particular, overseas Pakistanis only have this option to maintain their savings
- Desire of low to mid class to have their own home.
Properties worth less than 4m/5m can become the ones more in demand! I mean how hard it is now a days to give a couple of thousands to a law internee and he will help you become a filer with whatever engineered data, on the same day.