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Market Trend July 2016 DHA Lahore

Market Trend July 2016 DHA Lahore

Bird Eye View: Market Trend July 2016 DHA Lahore

In our effort to bring you more valuable news and analysis every month on regular basis. The market trend July 2016 DHA Lahore is as follows.

 

Implication of Enhanced Tax Net on Real Estate

The government of Pakistan has announced to increase taxation on real estate. The details of exact tax rates is not yet clear as an increase on CGT is also suggested and use of commercial rates instead of DC Values determined by the Provincial Government for taxation purpose. The impact of these taxes will be clearly visible in a few days . However presently the market is awaiting more clarification regarding the new tax system and ratios.

Although the DC rates for 2016 – 2017 have already been enhanced , the rumors are that taxation will be done on the actual values determined by the evaluaters of State Bank and FBR.

Presently a lot of rumors are circling around creating confusion. Once the entire details of these taxes are known, i will explain its effect on local real estate in full detail.

But is it Bad news really ?

Let us all wait for the situation to get clear .Right now i believe taxing black money is a good thing as long as it is aimed at the corrupt and tax evaders. Any such policy will have very positive impact on the economy of Pakistan and real estate sector in the long run.

Let us be clear on a few facts :

1. Prices in developed areas are not subject to investment of black money, rather are more dependent on there expected rental returns and genuine market growth.

2. In previous 3 months property prices in DHA Lahore have increased by 20 to 30 % and we still see everyone willing to buy at higher price. A higher tax rate may just add to the property price in developed areas.

3. Investment oriented un-developed real estate sectors such as 9 Prism , which do not give you any genuine yield , rather are dependent on the black money investors and “greater fool theory” may actually suffer from these new taxes.

4. The prices of real estate does not depend on the taxes rather depend on the purchasing power parity.

Case Study :

The price of commercial real estate in Broadway Phase 8 is determined by its possible rental value.

Average Price of 8 Marla Plot: 100000000/– (100M)
Cost of construction : 30000000/–(30 M)

Expected Rental Value per month = 700000 /–

What should you be expecting?

It will be a very good news for genuine buyers .

Bad news for the black money investors who are cause of market bubbles in real estate.

DHA Phase 1 to 5

Market Trend July 2016 DHA Lahore for DHA Phase 1 to 5 will be mostly stable. We may just see a minor correction before steady growth in these sectors.  The new taxes will hardly have an impact on these phases.

Keep your eyes and ears open for

News about Pentasquare or M block Phase 5 .

Recommendation

a. Buy commercial for rental purpose.

b. Buy in M block Phase 5 .

DHA Phase 6

Again we do not expect any major price fluctuations in DHA Phase 6 . Instead we believe that the uptrend will continue in Phase 6 steadily . It is a well developed phase and presently rides the waves of genuine clients looking to build a house.

Keep your eyes and ears open for

a. After Eid we may see a sharp rise in House sales in DHA Phase 6 .

Recommendation

a. Buy residential plots in D, E , F , N blocks.

b. Buy commercials in CCA 2 .

c. Buy on Mb in L block.

DHA Phase 7

As  expected we did see a minor correction in Phase 7 commercial plots during Ramadan . However the residential plots continued there uptrend even during Ramadan and went stable by the end . DHA Phase 7 Market Trend July 2016 DHA Lahore may see a correction in Phase 7 prices after Eid.

Keep your eyes and ears open for

a. Commercial File prices may tend to go down a bit.

Recommendation

a. Buy residential if you wish to make your own house.

b. Commercials Files can be bought for a short term trade on dips.

DHA Phase 8

The newly levied taxation will have no impact in DHA Phase 8 . The residential plots will continue to be stable or may just see a minor correction before continuing the up trend.

Z Block may see correction in light of the newly imposed taxes.

Broadway , CCA 1 and CCA 2 are all seeing a lot of interest by investors .The Market will remain mostly stable till the uncertainty about the new taxes is lifted.

 

Keep your eyes and ears open for

a. Downtrend in Z Block ivy green.

Recommendation

a. Buy residential on dips if you wish to make your own house.

b. Commercials should be bought in Broadway and Air Avenue.

DHA Phase 9 Town

In DHA 9 Town  the prices are rather stable and increasing slowly.  I  do believe that the prices of 4 Marla commercials have not seen the top yet and

Keep your eyes and ears open for

a. Commercial files have increased by 7 Million very quickly as we suggested in the last month analysis. We do not see them rising any further from here on.

Recommendation

a. Surely a buy for a few months and enjoy a million or more on just an investment of 5.5 Million.

b. Buy 4 Marla commercial at 320 to 340 Lacs.

DHA Phase 9 Prism

The news of increased taxes may actually effect 9 prism negatively . The issue with non developed real estate is that its prices are subject to steep up trends and down trends on expectations rather than ground reality. Market Trend July 2016 DHA Lahore for phase 9 prism is very negative.

Keep your eyes and ears open for

a. We will not invest in Phase 9 Prism under these circumstances and wait till we are clear about the new taxation system.

Recommendation

a. Sell residential and Sell Commercial .

B. Do not buy in blocks such as A , B and C which are too high. We recommend buying a mediocre plot in 65 to 75 Lacs any where though in 9 prism.

DHA Phase 11 Rahber

As per expected Market Trend July 2016 DHA Lahore the prices in Rahber may come to halt. A minor correction is expected however influx of foreign investors may just let the boat sail smoothly.

Keep your eyes and ears open for

a. We expect the residential plot prices to remain stable this month , we believe we have reached the top prices in Rahber as of now. However balloting news may just sky rocket the prices again , which is rumored to be this year.

Recommendation

a. Sell what you have.

Note:

I hope you will find the information provided in Market Trend July 2016 DHA Lahore to be useful and informative . These are just guidelines and markets tend to change with in hours and days specially when buying Files. Kindly consult me before making your big decisions for updates.

 

Captain (Retd) Shahnawaz Yaqub Bhatti

Investment Consultant and CEO at Imlaak

Mob : +92 333 1717170 ( Whatsapp)

Skype : Shahnawaz.yaqub

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abdul baist
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abdul baist

what are now price of 5 marla plot in dha phase 6 minimum after implementation of taxes ??

Faraz Khalid
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Faraz Khalid

Dear Shahnawaz, I have a 5 marla residential plot in DHA 9 town block B on good location. Can you please advise me what are the chances of its price increase if I hold it for further 3 to 5 months? Would appreciate your analysis on this. Thanks & Regards

Qasim
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Great article!

You might want to consider other projects like bahria, lake city and fazia?

Muhammad Qasim Alvi
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Muhammad Qasim Alvi

Dear shahnawaz
I do appreciate your grip on the subject. How do you analyze 9 town file of F block, under the prevailing circumstances. Should I hold or dispose it off.
Regards
Qasim Alvi

Wasim Khan
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Wasim Khan

Development work is going to be start in DHA ph 8ivy green Z block.how much price difference is expected and government tax also effect military benefits(war injured) plot in z block .your kind words and expert opinion should we hold this plot are get rid of because installment plan is till 2033.

Amir
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Amir

Dear Shahnawaz
What are your comments about investing in H Block of prism for long term ..

Dr athar Rauf
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Dr athar Rauf

An excellent and composed view it really opened my regarding purchase and sell in dha