Slow and declining market

Buying Property Investors Advice
#1

I want to confirm the uncertainty prevailing the market. Prices were either stable or showing some improvements but for the past few months real eatate market has been slow and even declining. Bahria 1-6 and 7-8 has declined, gulberg is also seeing a declining phase. Heard about i-8 where 40*80 houses touched some 45-50 million has now fallen down to 35-40 million, even d-12 has seen some decline. Now this is surprising as i heard cda sectors never decline once whatever value they reach.

What confuses me is that when i check rates with property dealers story is different. Looking at g-11, g-13, g-14, g-15, i-8, dha etc. It seems for the past few months prices have increased dramatically here.

Is it true and i have wrong information or is it that property dealers or mafia have inflated the prices which are bound to fall esp for genuine buyers and sellers.

Also reason i heard for this decline dominantly contributes to the real estate cartel moving their investment in dubai and i think unless they come back to pakistan prices are going to fall further add with political instability.

Kindly advice as i want to make some investment but am confused about this prevailing uncertainty in the market.

Heard this from my close friends in real estate business about declining prices and the decline in CDA sectors is roughly about 3 million plus minus they told

#2

Kaisay likho ge zindagi ki kitab ... Tum tou karnay lagay pal pal ka hisab.

There is no doubt that market is slow as well as weak. But at this moment in time, probability of down side is low as compared to up side. If you are interested to invest, try to be long term as no one knows when this bear cycle will finish.

#3

Naveed indeed you are right but you see it is about time that matters. Rather than investing in real estate with a declining trend in the future so would it be better to invest in a bank instead. I know bank rates are far too lower than the gains in property but will the current uncertainty opt one to go for a bank instead. I hope long term does not turn out to be something 10+ years

#4

Mobeen you seem to be thoroughly confused about real estate trends..

Real estate investments are all about predicting the future trend and finding the real value of a property..

I advise you to read discussions in different forums at Zameen and you will comprehend the present and future trends...

#5

I think this is a Demand and Supply issue, with so many emerging societies around islamabad is giving plenty of supply resulting in surplus, genuine buyers has so many choices based on their budget and land needs, investors are already stuck in currently developing societies and waiting for good returns so avoiding selling, I am not very much familiar with real estate market rules but can say if possessions are given at same period even within a year interval in few societies like dha2/gulberg/bahria8/enclave/ghori town/b17/i-15/16....etc, it's not going to give a big jump in prices rather will give more options and supply and the current economic situation in country has no intention to boast any kind of business.

I hope some expert can describe it in a better way.

#6

Thanks imran khan. Matrix sb may you clarify my confusion. Yes i understand it is about predicting and finding the real value but predictions can also go wrong where the real value may turn out to be more of a nightmare like in B-17 for instance where at one stage no one thought it could ever do down. But that is oriented to that particular society and its shortcomings.

Regarding the overall market of islamabad what you think whether all zones including CDA sectors would see a downfall, though very nominal, but no more gains for sometime.

If you think this is not going to happen and prices are going to rise, albeit, kindly explain why you think so.

Sir it would actually take a very long time to go through each and every forum so kindly assist with something that i may use to understand the different forums better.

#7

Mobeen every society has its own dynamics at work, a rise in one society may result in decline in another...At one point of time B 17 was rising and Gulberg was stagnant.. At another point of time B 17 was falling while Gulberg started rising..

Same is the case with BT Islamabad and BTK. You should choose and focus one place and then we can discuss its dynamics and rise and fall...

#8

Sir cda sectors prices have not fallen by a single rupee…i-8 has appreciated very much and is maintaining its price tag.g-13,g-14/4 have recently undergone a small increment in prices. Dha has maintained its tag and bahria 1-6 have gone through a small correction phase.yes gulberg saw some decline and b-17 declined very sharply.g-15 has also gone through a small increment.D-12 has maintained its tag but its not increasing now.

#9

Hm saadi sb thankyou for reply. But sir can you clarify are people really buying in places you mentioned where prices are increasing like g13,g14/4,g15,i8 (at the increased rates) or is it just that people are holding on to their properties without actually selling but at the same time increasing the rates with passage of time, for example, demanding 10 millions for any plot in g-13 an year ago, could not find buyer and now with the passage of time have increased it to 14 millions till today's date without actually selling due to unavailability of buyers.

Matrix bhai kindly consider I8 as per your knowledge has it seen any decline in the past as i heard a 40*80 house, some time back, for instance reached approx. 50 millions but has now fallen to around 40 millions. What i am referring to is inflated prices. Something worth 20 millions in I8 almost 5 years ago is now worth almost double like 40 millions but some time back it hit even close to 50 millions so why it fell back and why the decline is what i fail to understand.

#10

G-13 and g-14/4 have number of factors going for them including construction of KH, construction of new Islamabad Airport etc. Plus the sectors are slowly getting well established…There is a lot of construction activity going on in G-13 and G-14/4, plus the markets are also operational…so it really doesn’t matter if your plot is not selling…if these sectors can get more established in like 2 years from now…The prices can increase further…

#11

Dear Frndz,

In my opinion decline in prices is there where prices were on higher side & in those sectors where prices were not on higher side there is gradually up word trends in prices.

#12

Political sit-ins in Islamabad had caused the property prices to fall. When the sit-in were wrapped up, prices started to follow an upward trend.

The decline today could be a correction and it could also be because the property investors from different cities have started investing in Bahria Town Karachi.

Moreover, the rise and fall of prices is norm in our real estate sector which now works more or less like the Stock Exchange.

I don't think this is a symptom of any property bubble popping. Correction is one of the aspects of real estate markets. And I think, the price fall should not bother the investors much.

Rest ALLAH knows better.

Regards,
zain Nadeem

#13

@zain...Don't you see some inflated prices in localities like dha/cda/some places in Lahore which can trigger a down ward dip or kind of leaking bubble,taking the innocents(stagnant societies/or some better ones) on the way to netherworld limbo route.

BCZ prices have down ward movements only in specific areas like BAHRIA/B-17 in Islamabad and some small societies, OVERALL ITS A STEADY UP MOVEMENT.

My simple view is that we don't have enough number of rich to buy above 2-2.5 crore /kanal plots in DHA. And SAME GOES TO CDA ,but cda posh areas are limited ,so can find the rich to buy at exorbitant rates.The areas of CDA which are with societies or corporate and there is only investors business going on can be problematic leak of the bubble.

#14

We recently had correction phase so prices are almost there where they should have been.

Dont consider little + - . If you r not playing satta then it is good time to invest .

2014 was very bad and every one still stuck but

Purchasing at these low rates in going on .

Once aggressive buying start known as tezi you never find good deal.

As far as price fall in i8 is concerned .dear you are comparing today's price with boom period of DEC 13 's price.yes in that case it has reversed .

#15

Mobeen, take this as a rule of thumb. When the whole market stumble, the properties that cater to the housing needs start rising and shine. I-8, G-11, G-13, G-15 and DHA-II fall in this category and prices are in fact rising everyday. This is not a marketing gimmick by some unholy realtor alliance. This is rock solid and genuine and will continue to rise until security situation in FATA, KPK, Blochistan and Karachi stabilizes and affording people migrate back. Whenever it happens, it will affect the above listed CDA sectors. So, the answer to your question, whether people are actually buying in these sectors, the answer is BIG YES.

Now we come to new projects where investors are trading, yes, there the big factor is cartels, who play with prices. Right now, they are all playing in dubai, but correction has already hit Dubai market, so lets hope that money returns to Pakistan, including that looted by Malik sb in BE2, Biz District and BTK.

But dear, this is not the time to argue, it is the time to invest as market is calm like a lake. You should take position before storm hits the shores.

#16

Isloo is right. Rock solid investment is where housing push drive prices upward. But such investment require heavier amount.

#17

Dear isloo when market conditions improve or when the storm hits the shore, the sectors or societies catering housing needs like dha2,g13,g15 still continue to rise in price or is it the turn for the opposite ones?

#18

Any place which has housing push will grow in most circumstances.

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