Please can you guide us what is the impact tax on property prices. Most of the property analysis saying that no impact on property due to recent tax, however, few strongly analysis that the prices will decline very shortly in few months. Can you advice us the impact tax on prices of flat in Karachi.
I can only give you a general idea as far as Karachi is concerned as we deal in Lahore only atm. The prices will not decline because of Taxes as a thumb rule prices will go down in underdeveloped sectors where investors were the cause of price bubble .
Taxes will not impact any areas where there is genuine demand or in other words developed areas where you can build a house or commercial. These sectors may also see a minor correction but that is more of a stability and a good time to purchase in these areas.
Market will slow down in general as it always does in 2nd half of the year.
Thank You very much Sir for a prompt response.
Sir, I did not understand that the Government first slogan was to exit of “Black Money” from real sector and most of the analysis also endorsed the same and also claim that the prices will be down very sharply. But there the situation is differ, any common people which are already in tension due to high prices of property. Hope for the best… Thank You once again for your comments.
Yes exactly , the initial crack down was on black money and that did created a lot of panic in the market . There is hardly any one who buys with 100% white money . However things changed and the Government changed it stance . Now although they have increased tax by 20 % , the black money issue has been resolved and rightly so . We do need these reforms but they must be brought forward steadily one by one or the people will panic and the outwards flow of money from Pakistan to various tax heavens in the world will grow exponentially.
The lesson learned is sooner or later the tax reforms will bring all money in tax net and people should stop stealing taxes. It is better to declare as much of your money as you can and not to be afraid of positive reforms .
In general the market will be more stable and the prices will only increase in areas with genuine demand.
Investment oriented under developed real estate sectors will come down.
Flats and apartment prices will settle down at there genuine assessment values. In some places the investment bubble rises the prices of apartments and home more than the other . Such projects will face a downfall.
In other words real estate will flourish and you will get more for your money in return .
This is the time for medium and long term investors to jump in and purchase properties at good rates.
Dear Tepu market has already gone through a correction of 10% in developed areas and more in undeveloped ones.
Phase 5 will now generally remain stable.
Phase 8 and Phase 6 will generally remain stable . I do believe that some areas in Phase 8 can go for a bigger correction but over all shows stability and improvement in couple of months.
Phase 7 and Phase 9 will be the biggest sufferers . Commercials in Phase 9 will be the biggest sufferer.
You can read my analysis of August which covers almost the entire market of DHA Lahore.