Dear all,
Challenges to pakistan's economy, soaring debt and upcoming political change along with looming accountability process has started to effect property market. In these scenarios it's better to prepare for worst while hope for the best. My question is:
Does it make sense to move from projects with already over-inflated prices to the projects which are not as much over-inflated?
Also which projects will more immune to the risk in near future?
Following are the risk Levels
Files (Highest risk)
Balloted plots with no development (High risk)
Development on going with no possession (Medium risk)
Possession granted but no houses constructed (Medium-Low risk)
Populated areas (Very Low - No risk)
Sheikh,
Risk factor you mentioned is related to developer's performance only. While, I am talking about overall economic condition and possible upcoming crash. I think your didn't understand my question.
JDM, soaring debts and trade imbalance might be negative, but growth rate is high, so economic activity particularly housing sector is less likely to see any slowing down.
Crash is a myth, mostly hyped by the media and politics.
The current stagnation is solely for the strict tax measures that stop black money inflow into real estate sector. This has regulated the property market and removed speculative 'games' as played before. The market will take adjustment time before it takes its new course. So there is hope,
Isloo1,
Falling exports are major problem right now. Next government will shift all investments towards manufacturing industry, a major shift of the money parked in real estate is moving towards industry. Major banks and developers like habib rafique are already exiting out of property market. So don't you think that such major shift will have no negative effect on property prices.
I think property market is heading for much bigger decline. Diversification might help somewhat. I think projects like Phase-8 and B-17 will see smallest decline while DHA, Bahria Enclave, Gulberg will take major hit.
Hi JDM
I tend to agree with you that in current property market situations, it seems wise to invest where the prices are low rather than investing where prices are already artificially inflated as it is high risk and you may lose quite a good amount. However even in areas where prices are low, it doesn't seem to return much before 7-10 years.
Asif,
This is my view also. Places with cheaper rates will take smaller hits. Property ka rona shuru ho gaya hai bhai. I personally know houses built 4 years ago are still in market for sale and no buyer at all.
Property market can not be generalised by the slow turnover of housing units, there could be so many reasons for a newly built house to not get sold easily, sellers' margins, buying power, taste quality location and design of the house, competition, and so on,
besides selling a house is a very tough business,
in my experience, I have never had a house which didn't sell within 1 year, which I think is very normal in our economic conditions
but to say that property has started crashing is a bit of an overstatement, I think.
"While, I am talking about overall economic condition and possible upcoming crash"
Real Estate crash might be one of your wish, but i don't see your wish coming to reality. Yes Price correction is possible and it is necessary for healthy real estate trend.
@JDM
My first post was in response to your following question
"Also which projects will more immune to the risk in near future?"
........... I think your didn't understand my answer :)