Making Money In The Present Property Market
Apparently it seems that the property market of Pakistan has been slow ever since the 2016 Budget which levied a number of taxes on the sale and purchase of the property. The uptrend halted immediately and ever since prices have been mostly stable and in some areas we have seen considerable correction as well. Investors seem to be worried and so are many agents, property is not going up speedily enough to make huge gains in short term. The reality on ground is a little bit different and while apparently the property market in Pakistan has plummeted we have seen huge gains in Gwadar, we have seen file prices of DHA Multan and Peshawar gaining 10 to 20% and we have seen various other sectors continuing to record highs.
Let me discuss one of the the high achievers during this time which happens to be DHA Phase 9 Town, 4 Marla commercial file in DHA Lahore. Before the market slowed down in July 2016 it reached a high of 350 to 360 lacs and afterwards plummeted down as low as 240 Lacs in 2016. However just 10 months later it stands proudly at 350 to 425 Lacs after balloting in July 2017.
“In the middle of difficulty lies opportunity”
Another curious case was DHA Rahber 4 Marla commercial file which went up to 240 Lacs before crashing down to 160 Lacs and ever since than it has been slowly going up and now stands at 215 Lacs. It is also expected that balloting of these files will be held soon and the prices of plots may go up to 250 to 300 Lacs.
I can give you a lot of examples where the plot prices have risen since July 2016 against all odds and assumptions. A number of opportunities in the past year have been highlighted by imlaak such as Gwadar investment , buying of 4 Marla commercial files in DHA Lahore , DHA Peshawar and DHA Multan .
If you have been following imlaak real estate market analysis you will also realize that we have been successful in highlighting the major areas where profit was expected in the past year. No one can be perfect though and yes we cant be 100% accurate all the time but even if we are 90% right in our analysis that is a huge achievement and a proud moment for us as real estate consultants.
It will also be right to admit that the past year has taught us a a lot of new things as well and that will eventually help us make better analysis in future. We did miss some areas where opportunity existed, such as 5 Marla plots in Phase 6 D block etc, however we have learned and will help you make even better decisions in future.
What have we learned so far?
We have learned that this is not an investor driven market any more. Rather this is a property market where genuine investment is driving the realty. The market responds only to actual signs of development and not rumors any more. This is because of the cautious approach by both investors and genuine buyers. One more thing we have learned is that the chances of price bubbles before the balloting are a bit rare, however prices do go up after said balloting. Similarly the developing and populated areas are showing signs of positive trends, where as areas under going development are in a situation of stale mate.
What to do ?
In order to understand what to do, you must understand that the price bubbles formed due to investors interest are usually short lived and eventually crash. The present real estate market is how a property market actually works and is not a down trend. In reality after 2016 all the price bubbles crashed and the market under went a correction, initially this effected even developed areas but later on things changed and developed areas started giving better returns.
Where to invest is actually rather simple, instead of jumping into the unknown on market rumors, only invest where you can see development happening, construction of houses, expected areas where balloting or possession is expected or invest when you can see any other significant landmarks of development.
I hope this will eventually help you make better decisions about your real estate investments. Stay tuned with our real estate analysis to know which areas are next in line to offer a good investment opportunity.
Founder & CEO Imlaak
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Skype : Shahnawaz.yaqub