Tuesday, October 1, 2024

Post 24/30: An analysis of why prices of plots (properties) in Pakistan went down?

 

(Source: Pixabay)

I thought of learning about different aspects of Pakistan, as I want to do something for it. Therefore, I started with some of the well-known indices or reports that would help me in gaining more information about Strength, Weakness, Opportunity, Threat (SWOT). These were 12 posts. You can search my posts related to Pakistan by typing: #UsmanZafarParacha_Pakistan

Now, I have been learning about real estate business in Pakistan. I have started from Youtube videos and hopefully during my learning Journey, I will get some more useful resources to move ahead in this learning and perhaps entering into the real estate business.

I have seen a video, titled, “Are Major Housing Projects Like Bahria, DHA, and Lake City Failing? | A Detailed Analysis” on the channel “Titanium Group”

The host discusses the impact of the overall effect in Pakistan on Real Estate. He discusses that property are really at their lower level, and it is a sort of “shopping time.”

Money always comes towards bigger cities (such as Lahore, Islamabad, and Karachi), rather than moving towards smaller cities.

Considering the prices of Bahria Town, Phase 8 (extension), he discusses that about three years ago, the prices were about 35 lacs; about two years ago, these were about 25 lacs, and now the same plot file can be obtained in the price range of 15 lacs. The host discusses that one of the most important reasons in the decline in prices that initially traders (reaching up to more than 75% of businesses) were involved in selling and purchasing of property. They were not end-users. Actually, end-users like to remain in the process. For instance, they would like to live in the house after purchasing the property. Now, traders are out of the process.

The host tells that in Bahria Town, Lahore (Phase 2, 3, 4), 5 marla plots can be obtained in the price range of 35 to 38 lacs, and 10 marla plots can be obtained in the prices of above 70 lacs. These are the same plots that were initially available at the price of about 1.25 crores.

Aside from plots, commercial shops or apartments can be found profitable in the next few years. This is also one of the reasons that people have moved their money from societies to high-rise (buildings with upper floors). Most of the direction of money coming from outside of Pakistan (remittances) is also towards high-rise. In this case, an interesting point is that suppose you get a 5 crore rupees house in a good society, it would help you in getting a rent of about 50,000 rupees, whereas an apartment of about 1 crore rupees can easily give you this amount of rent.

The host suggests that investing in property (plots) can be fruitful in the next few months. Moreover, investing in high-rise and under construction projects can also be beneficial in terms of taxes, as government as implemented low amount of taxes in these cases (probably appreciating living in high rise).

Follow my Hashtag #behtareenkitalaash on Youtube: https://www.youtube.com/hashtag/behtareenkitalaash

Sources:

Titanium Group - https://www.youtube.com/watch?v=Zgx4ck8rzEA


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