Real estate prices have been fairly declining for many months now.
Budget implications - enforcing NTN use might have discouraged few but after the current havoc in Karachi. I see government will rightfully launch an operation soon. And if it happens, am afraid, there could be a strong pull back by investors at least for a short term.
Thoughts?
See it coming…KSE index down 39 points on security concerns.
Actually in last 2 months prices have increased in Zone 1 especially G-13/14 with impact on G-15/F-15. Multi is not declining it is stable in B-17 and rising a little in F-17.
You mean prices in realestate can increase due to operation? Please correct me if i got wrong meaning of your post.
I think it's temporary setback for the real estate business,it has been tough this season but the good times will come back soon inshAllah.
Regards.
PK1 its not about multi or G15 and some price movement there. I was referring to the overall sentiments of the market.
I don't see the enthusiasm of investors, in fact, many are trying to consolidate their portfolios.
Irfan, I meant prices can decrease in a volatile situation especially when the investors confidence is shaky already.
@Nadeem i hope that’s the case. If government managed to contain terrorists in reasonable time then there will be a boost, otherwise situation could be more disturbed.
Only Karachities confidence is shaked , few days ago when the news from UK came KSE dropped 750 points within minutes of the news.
Islamabad market is standing on soild footings.
But overall i think the Posession Options did not face any major setbacks only Non-Possession whether its CDA, Bahria or Multi investor's are re thinking again for their next move.
But i agree with this "Lack of Enthusiasm" by investor's
Yes MBS you are right, the enthusiasm or if we may say the boom is not there. The bulls are not roaming free, but prices are not generally in decline either. Yes there has been some adjustment in B-17 and Bahria Phase 8 but even in these areas the prices are still above the pre-2013 boom levels.
In G-13/14 there is a mini-boom which is sustainable because it is largely on the back of genuine buyers with a few investors (but hardly any speculators).
In G-15/F-15, you cannot say there is a boom but it is also feeling the upward impact of G-13 minim-boom. If you compare demanded prices in G-15/F-15 from price levels demanded 2-3 monthos ago, you will note that prices are on the up.
That's the reason I already quote that their should be a pool of genuine buyers along with speculators. If their are mostly speculators then the baloon can be pricked anytime.
The possession options are solid speculators along with genuine buyers both happy at the end.
JKCHS and G-13 getting upward feel due to this posessesion reason
I totally agree with Pk1 and MBS,
I don't think, it will make serious impact on real estate as pakistani people tend to forget everything after few days.But that's a fact that overall market sentiment is negative with lack of buyer and over supply.One can blame bahria for shortage of money and over supply resulted in lack of buying demand by launching huge number of plots which are in lacs.
Pk1 is right few solid sectors are gaining normal rise , I don't consider it to be boom but a normal rise.B-17 stable but from last july 2012, it went up little as compared to bahria phase 8 where normal 7 marla plots for available for 12 lacs and 10 marla was available for 15 lacs.So more room of correction in phase 8 still as it went higher in last 2 years as compared to any other real estate sectors.
Infact g-13,G-14 didn't move in last 2 years ,may be 30-35% maximum.Till now bahria phase 8 is far far above than july 2012 prices.It will take it's time to complete correction.How much no body knows except MR who have all the money in hand as compared to any other.
I agree tangible assets in the hands of end users wont be affected much and are likely to sustain and gradually improve their prices. But the underlying assumption here was what will be the take of investors who usually invest in files and "non-possession" options.
In my opinion, prices have increased massively in last two years -to unjustified levels in some cases, that's the segment which in my view could be prone to severe correction.
If we limit the vision to airports issue.
In wake of recent activities, the people having benefits/interests in non-development of real estate activities around new islamabd airport, may try to raise some issues.
I agree with MBS that files could hurt further but again not because of this operation but because of overall lack of buying interest.If you see kanal and 10 marla BTK and 8 marla homes .These are still in profit or in marginal loss because of limited supply.5 marla BTK and BE 2 5 marla have huge supply,so affected most.These files will move with general market sentiment.
Far as I know, gains in Pakistan real estate have out-performed any of the real estate in last 2 years. Now is the crucial time to sustain investors confidence.
Insecurity and lack of integrity on part of major developers will inflict deep wounds to small investors.
Its a bitter truth that trading of files is a non-productive, non-sustainable investment in economic terms, as it does not yield jobs, other than for dealers and blocks major chunks of capital/savings. If these files do not quickly transform into tangible assets, they will gradually/spontaneously lose their value and making any gains will become increasingly difficult for investors.
In recent budget, government has also tried to tackle this files business and encourage real buyers to buy and actually construct houses instead of inflating the market on speculation.
In one line, files should not remain files for too long, they need to become tangible assets or else it could be a nose dive anytime.
In Pakistan, real estate rises when security situation is bad. The recent past is a witness to it. Very soon, there is a strong possibility that Afghanistan will drench into another bloody civil war (where Pakistan will be heavily engaged), sending a lot of refugees across the border into Peshawar and the rest of Pakistan. Then there is a looming massive military operation which seems very much likely in FATA and adjoining areas, this op will displace many people internally and put a further pressure on the cities and real estate in general. On top of that many people are migrating from KPK into Islamabad, Lahore etc. Then you have Modi in India who has appointed a nasty Intel chief and has bad designs for Pakistan in general. Then Mian Sb wants to make a Pak-China Economic Corridor, which is not liked by our neighbours and many global powers and they will do their best to dislodge it. So all this will lead to a rise in real estate business, as Pakistanis are good in making babies and there is a lot of demand for housing as well. I might be wrong but this is my analysis on the political/security side of things.