People who are looking to buy plots for investment in pakistan better look elsewhere as the pakistani rupee has devalued so much that my 6 years of investment is in the loss right now even though plot value has doubled. Well done imran khan.
Sir, I will have to agree in principal to the devalued PKR, crash we must say to meltdown the economy. Yes, that has been due to political turmoil and the way what happened post 2017.
Just to add: If the plot price has doubled that is still at profit, though gains burning-off fast. From Mid 2014 to now, any plot/asset that has been doubled in its value will start losing (per USD) when USD crosses the 201 PKR mark. USD on Aug 22, 2014 stood @ 100.64 PKR approx.
Investor bro, my sympathies with you.
Pakistani rupee has already devalued heavily so your warning is little too late and may send new overseas investors to loss because Pakistani property market is all set to climb again. And there are no signs of immediate [major] devaluation. At least this is what I am reading.
"Investment is the game of timing." --(Isloo)
Agreed to Iskoo1 sb
We bought 2 kanal plot with 1 kanal extra land in phase-8 for bzness.
Was dead silence up to start of this month.
Now parties are putting offers with good profit. This may be due to extra land and location but one party even visited my house to make a deal.
Even there is a slight rise showing up in the slowest DHA project DHA valley in hot blocks in the last 14 days.
Abdul Qayyum sb,
Just hold off couple of months, this will give you good profit, IA. I've been reporting on other threads that Lahore DHA possession phases already jumping high. There's 4-fold increase in daily transfers at DHA office. Shows signs of recovery that may expand into Rwp/Isl. Whether this sustains or not, we'll know it after December.
Noted Isloo sb
My boys are working to start another plaza in overseas-5 and if I could get commercial plot there, I would settle at latest good offer , may not be best one but bzness surpasses solid investment versus wait.
Pls do reply if you could connect us with a commercial plot deal in overseas-5
Do nou worry about price, we know the prices Alhamdolillah.
Yes, this is true. Keeping in view the devaluation of rupee investment in property is no longer a profitable business. Even stocks are hovering around 40k. Those had reached 54k before dharna and political turmoil. This is not only for foreign investors but even for Pakistanis. If inflation is 11% or more then in the end it is net loss.
Taimur, your overall point regarding economic melt-down is understood. However, in the strict sense of speaking, a foreign investment is immune to local inflation as the money has to be repatriated back in dollars and not spent in the local market where it has lost its purchase power due to inflation. This is my understanding as a "non-economist".
The ultimate question is: How far will USD escalate against PKR, in foreseeable future, let's say FY 2010-2021?
PKR is fragile to the point that only 1 BN USD (out of 12), that too Borrowed to Repay has slided the PKR in just a couple of days!
So far, since Mid 2018, there is only 1 clear winner of USD vs Real Estate! and that 2 - 0 for now!
Real Estate did see multiple down turn in current decade but the existing one is unprecedented due to a combination of Devaluation, Inflation, GDP fall just to name a few!
General Dilemma:
Residents can't save enough | Overseas don't see the value to encash their foreign reserve into local asset.
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In last 2 years, each USD yielded 47+ PKR as profit and it's a universal asset with time to cash = 0. One can do the math to correlate how much their RE asset gained (subtracting factors like taxes, transfer fee, commissions, time it will take to liquidate).
As much as I am a Real Estate Investment advocate, I see USD giving PKR a bloodbath when IMF and other lenders start to recover their bucks from next Fiscal Year!
Hi,i have a 1 canal plot in phase 9 prism which i bought in dec 2019. Now the dealer is saying to sell it and get the profit. Buy it again after 5 to 6 months with the lesser price.
what do you think of the market after 5 or 6 months.
or is this a good time to sell.
Regards
Dear Farooq,
Hold it and don't listen Dealer because it not selling time.
Regards
Farooq dear, it is true that all phases of DHA Lahore have seen sudden hike in price demand, whether it sustains or comes down, can't be said now. But the pundits are predicting December to attain Nirvana.
So wait till mid-night when the party gets to its peak ! ! !
With Dubai under pressure from FATF to tighten the noose on dirty money which is a building block of their economy and Pakistan offering an immunity till December. I feel we will see this money getting poured into real estate at home.
I have observed an increase of around 2 to 4 lacs in average asking prices at Faisal Town in the last few weeks and could relate the above phenomenon to the new offering by Faisal hills as well.
On the same note, market differentiation is a key part of business strategy where companies charge different prices in different markets. Therefore, accepting the fact that we are not the lucky ones who are getting paid in dollars through criminal collusion (LNG terminals is one example), we should accept the realities of the Pakistani real estate market before investing. For example investing in Islamabad’s Zone 1 is comparable to London because when rest of the U.K. Property prices slashed in half after 2008’s recession there was no affect on London property prices and they actually rose during that period. Therefore, short selling in real estate and making huge bucks only happened in Pakistan (last two decades are an appropriate example) that’s why people are so keen to invest, however that is not the case when market matures which is happening now.
We should get a law similar to RERA (under a new efficient body instead of the CDA, LDAs) used in Dubai and now in some Indian states. This will help to regulate this Jungle of Pakistani real estate even further and investors will be able to make informed choices.
Pakistan is accumulating a mountain of debt that will need to be paid with interest. Since the countrys exports are not growing and the general public does not like to pay any taxes hence the currency is heading towards further devaulation. I personally suffered in 2018 when I had just sold a commercial plaza in Rawalpindi and the currency devalued around 20% before I could get my money out.
Rauf sb, agreed to you in principal. However, "general public does not like to pay any taxes"
Sir, there is not a single product/service/commodity including birth and death events that are not taxed. This narrative has been built by those at the top who evade taxes and than put it all on
'yeh Awam Tax Nahi deti'. Just see the latest electricity bills and the number of taxes, enough of an example to demonstrate all!
@Imtiaz, I agree with you that the elite class in Pakistan does not pay its fair dues and never misses an opportunity to rob the masses e.g sugar mafia, flour mafia etc. But the fact remains that a country where less then 1% of the population pay any income tax will not progress. Yes, I agree there are many indirect taxes like GST, Surcharges etc but these are also present in developed counteries e.g UK has VAT @ 20% on goods and services. This country desperately needs to attract long term overseas investment that is not going to happen unless we have a stable currency which gives the overseas investor confidence to calculate his/her return of investment (ROI). I say this since I interact with many others who have in the past invested in Pakistan and some made handsome returns. The original thread was started by brother “Investor” who no doubt has a valid point.
Sir, Tax Net and quite exploitative one actually is there and its getting harder for commoner to evade any tax in the form of assets that they own. I am all in for proper tax regime.
However, unlike other systems where you pay tax and state takes care of you (health, education, social security etc.) and people que-up to pay taxes. I am sure our nation will be willing given that even if no basic health, education, social welfare by state but treatment with dignity and respect when visiting sarkari daftar.
Unfortunately tax at gunpoint with not even minimal respectful behaviour in Govt. Offices is money extortion, even if to be very polite about it...
Example: Where on Earth an Overseas that send countless Remittances to country of origin pays tax at Airport on a Personal Mobile Device (visiting 1 or 2 months for parents/country) . Add insult to that injury on FIA counters passport info is sold in black and if you ask for you right those goons could beat you up ...
@Rauf Khan and Imtiaz
Just look at the budget and expenditure of last fiscal year and tell me, of the 4,000 bn collected in taxes, how were those spent?
I agree in principle that we should all behave as responsible citizens, but for whom? For the common good, I suppose. But then how much goes to common good? Probably nothing.
On the other hand, roughly 60% population earns from agriculture, that officially has zero income tax. Traders are unregistered and unregulated, their transactions are largely cash-based and undocumented. So they get away not paying income tax. Then there are hundreds of thousands govt civil and military employees who get paid from taxes, so income tax on their salaries is not generating any real income for the country. Rest is private salaried individuals and corporate sector business. Only these pay taxes. So, how can 5% carry burden of 95%.
@Isloo1, I totally agree with your analysis janab. I am normally not a negative person but anybody who understands simple investing rules will tell you that stability and predictability to some degree is key to any investment. Property being a medium to long term type investment needs such a climate. I beleive the govt has already admitted that the currency devaluation could have gone a lot lot worse (each $ could have been over 200 rps) then what it is now which reading between the lines implies to me that it is going to get a lot worse before it gets better (if). I hope/pray that I am wrong since it is the ordinary folk in the street who pay the real price.