Impact Of Budget On Real Estate

Buying Property Investors Advice
#1

It is expected a decrease of 20-25% in property prices after announced budget 2013-14: reasons are

1.Encircling real estate in taxation, 100 rs/sq yd on developed plots and upto 15% on property 2. Construction of thousands of 3 marla ashyana houses for low income pakistanis by present government. 3. Sky rise flight of stock market 4. Incentives and encouragement for business and industrial activities by present government 5.Introduction of new national saving schemes 6.Marked reduction in purchasing power of people

#2

Yes there are some factors pushing prices down, but there are also factors that are pushing prices up.

  • overseas pakistanis especially in gulf countries are more hopeful of things getting better in pakistan, so instead of keeping money in banks they will buy property in pakistan as a secure investment.

  • growing population and demand for housing in big cities keeps multiplying because of immigration from small towns;

  • better infrastructure, metro bus, fly-overs and good roads will increase demand for properties close to these areas inshaallah.

  • development of slowed down socieites will start and therefore prices will climb up.

-unfortunately the situation of pakistanis in west is becoming more and more difficult due to recent events; these factors are pushing them to maintain a home also in pakistan so that they can come and live here if things get worse.

I think prices will not drop.

#3

1.Well in presence of malik riaz and other king makers, will government be able to impose effective capital gain tax or wealth tax, let's see.

  1. Construction of 3 marls ashyana scheme can influence costly property of country like islamabad/rawalpindi.I don't think so.

3.Sky rocket flight of stock market has not started now it also started rising at the beginning of 2012 when real estate market started rising.So couldn't make any impact yet.

4 incentives for businesses and industrial sector? Still couldn't find significant incentive to business and industry yet.Could make impact but first, government should give some significant incentives.

5.Which new saving schemes been launched yet which could influence property. Still no new significant scheme been introduced yet which could influence property market.

6.Purchasing power of people been reduced not now but from many many years but property market has it's own dimensions.

But still i feel that property prices rose too much in last one and a half year or so, people could wait for 2-3 months to see how government performs regarding law and order situation, load shedding of electricity and what steps government would take to put country's economy on track.Till then prices can get stable or slight upward trend can be expected in developed sectors and less developed sectors can see slight decrease too.In long term, historically, pakistan property prices tend to rise in any circumstances.

#4

I think coming few months will decide the future of real estate market. But, i personally don’t see down trend in real estate market.

#5

Nice to see comments of property experts. Yes next 2 to 3 months of current govt will determine how things settle down.

#6

Let's see how much capital gain tax will be imposed by Government of punjab. Will it be significant enough to make an impact on property market or not.

#7

Whatever people say, market always follow this trend, property prices have already started to fall, people will move toward business and other investment as they will be getting more profits there and new tax will lower the property trading business as well. Rule of thumb whenever there is a downfall in country economy the property prices go up and vice versa.

#8

But hassan, savings can start moving from real estate to business only after the big problem of. L.O.A.D. S.H.E.D.D.I.N.G is resolved somehow or the other. Insha.Allah the new govt is working hard to reduce load shedding.

Until then, i think people will prefer to invest in real estate. That is why prices in even non-possession areas (such as dha valley islamabad and dha phase 9 lahore) are going up - what to talk of possession areas:-

  • islamabad (look at prices of zone 2 islamabad);

  • lahore (raiwind road and multan road societies after thokar niaz baig such as izmir town, sukh chayn gardens, bahria town, eme etc); and

  • multan (look at wapda colony and fatima jinnah town).

  • new societies are also opening up in gujranwala (such as canal view and magnolia) all doing well.

#9

Prices are constantly raised by people who have already invested in it, if you make a survey the numbers of buyers have significantly dropped, investors are just retaining their property to sell at specific profit, moreover raised in prices of construction material in new budget will also reduce profits of people constructing houses for selling so eventually that will also effect property prices, now there are more sellers then buyers. Property hike is about to over and will come back after 5 years.

Its more like a bubble created by investors, who in the hell will go for 1 crore plus kanal plot in bahria town lahore when they can get much better opportunity in many other societies, there are more investors in bahria and dha then people who really buy property for living there.

New govt will definitely push people for business and so are people willing to. Hope people get in more constructive businesses then selling same thing to others at increased price lol.

#10

Looking at the tax on houses in punjab is scary for the big guys! 5laak for 2 kanal house! If this thing spell over to the plots realestate prices will drop like anything. I am foreseeing that in the current govt as the govt is trying hard on self reliance and the only way to do that is to tax the wealthy. I have this grim outlook for realestate investment that it might not be that charming any more.

#11

As far as tax on big houses of 2 kanals or more. We can look at it this way. If plot of 2 kanal worth approx 2 crore, while in islamabad it's worth nearly double than this, and construction cost 1 crore 50 lacs. Total worth of house will be 3 crore 50 lacs minimum. 5 lacs on this becomes approximately 1.5 %, which is affordable for big guns. We will have to see capital gain tax on buying selling of developed plots of 1 k or less.Additionally other efforts government would take to improve economy.It looks government would work in right direction to improve country's economic and law and order situation along with load shedding problem.

If this happens real estate investors would have to work harder to find undervalued properties for better returns.

#12

Dear all, as we are discussing the impact has started to appear on dha lahore and bahria town lahore, today the property prices are showing a downwards trend? Any one will like to comment on it.

#13

As we are discussing this, today the property prices of dha lahore and bahria town lahore are showing downward trend. Lets see how things move on after provisional budget.

#14

Does it mean that while punjab as now capital gain tax, the federal areas (mainly islamabad) will attract more property investors?

#15

I don't know how much capital gain tax being imposed by punjab but as far as property tax on big houses is concerned it wont make big difference as it will be less than 1.5% as compared to impacts of GST which rose from 16 % to 17 %.Expected inflation rate could be 9% to-10%.Considering inflation rate property tax wont have serious impact on property market.

Pak property market has it's own dimensions, you can't evaluate it on daily basis like stock market.If country' s overall condition gets better with respect to economy, law and order and most importantly load shedding, it would have impact on property market.Nothing sifnificantly can change in next 3-6 months atleast. Don't expect any decline immidiately although rise could slow down or not, we will have to see.

Get the Zameen App

Buy and Rent Property faster and better
using our app.
Scan the QR code to
get the app

Get Connected

© 2007– Zameen.com. All rights are reserved.