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Pakistan property slump continues

Pakistan property slump continues

Real estate activates in Pakistan have stalled after the property tax amendments 2016. Transactions are 80-90% low from its peak in MAY/JUNE 2016. The new property tax amendments have badly affected the real estate sector. Even amnesty scheme is unable to give boost to stagnant reality sector. Pakistan reality sector has never witnessed such slump in its history.

Current situation of Pakistan real estate market

Unsold properties

1000s of houses, plots and commercial buildings are unsold since May 2016. Sellers have reduced the prices by 35-50%, but still no willing buyers. Small properties of worth up to 35 Lac have buyers but luxury properties are unable to attract buyers. One apartment project on Canal Road Lahore is 50% sold out at loss of 30-45%; Lahore has never seen such a state of the art apartment project in its history.

Launch of new real estate projects is record low

December is the month when lot of foreign Pakistanis visit homeland and invest in property sector. This is why lot of new real estate projects are launched by the developers. Unfortunately, launch of new projects in December 2016 is 90% lower than December 2015. Many uncompleted projects can be seen in major urban areas of Pakistan due to lack of interest from investors.

YES, some hype by realtors

Real estate agents are creating hype of health property market. Due to this hype, sellers are asking higher prices. According to some realtors there is 50-200% rise in property transactions in DHA Lahore. So according to the realtors if 5 properties were transferred per day in November, 20 daily transfers in December. But in May 2016, approximately 200 properties were transferred on daily basis. Picture is very dark indeed.

Reality check

After the discussion with realtors, buyers & sellers and price trend on which properties are sold out, Ghar47 has the following information:

Prices in DHA Karachi = up to 35% down from peak in May 2016

Prices in DHA Lahore = up to 25% down from peak in May 2016

Prices in DHA Islamabad = up to 20% down from peak in May 2016

What is in store for Pakistan reality sector?

5000 Rupee bill cancellation

Senate has recently passed two bills. First one is to abolish 5000 notes from circulation and other one is Benami Bill. These all measures are to control illegal money circulation and to bring more people to tax net. If these laws are passed by parliament, we will see 50% decline in property prices, as happened in India.

Genuine buyers will dominate the market

Due to high taxes and fear of amnesty scheme trap, investors are not willing to invest in property sector at the moment. When investors are out, market is dominated by genuine buyers. Small size & cheap properties are hot cake and will dominate the market. But high end properties will have no buyers.

Long stagnation

On price trends we can see some rise as realtors are creating hype of sound property market. This hype will soon evaporate as people are moving back to foreign countries after holidays. Market activity in December was due to foreign Pakistanis. What we see in long run is price stagnation. This is not new in Pakistan as we saw long price stagnation from 2006-2010.

Recommended:
History of Pakistan property booms and busts

(34) Comments

  1. abdul aziz

    on   said 

    I visited pakistan recently and wanted to buy 1 bed/2bed flat/apartment to live there after my retirement in 5 months inshallah. But after visiting Pakistan changed my mind. There is so much corruption, fraud and everyone seems to be after money – get rich quick schemes. I was born in Kashmir and successive Pakistani governments through WAPDA have destroyed my hometown of Mirpur. I thought perhaps we kashmiris have made sacrifices for Pakistan and perhaps the pakistanis will at least provide affordable housing for old people like me who were born here but afsos hai Pakistani government par aur logoon par yeh kissi kam kay nahin hain. Pakistanis are users and abusers! Not human. Children of rupees, pounds, dollars whether they get it by hook or by crook it matters not to them! Shatm karo oh Pakistaniyo chulo bar pani lo aur doob maro!!

  2. Vector

    on   said 

    i dont think prices of DHA have come down, we are searching for a plot n dha2 its nearly impossible to find a decent location under 9 million, 6 months ago prices were around 7 million of same areas
    dha1 sector f the lowest offer we found is around 11 million for a 10 marla plot … i dont know if im finding wrong dealers or ur sources r not telling right thing …
    zameen.com is a goto place for anyone who wants to fins a plot price before visiting dealers n i have seen no change in last one month of my quest to find a plot

    • Vector
      What they are showing in graph is the asking price, which is very high
      Sale price or prices on which properties are sold out are much lower

      There is project in Lahore, APARTMENT PROJECT,
      Prices have been reduced up to 35% but no increase in sale volume

      Two new projects in DHA Islamabad but looks like buyers are not much interested

  3. Haris Khan

    on   said 

    Hi, I would like to invest in TopCity Islamabad near new Isb airport. Would appreciate if anyone guide me with prevailing prices of 1 kanal plot and advise if this location worth investing for future gains ?

  4. muhamamd azeem uddin

    on   said 

    pakistan is not for poor people as well as middle class. They will spend whole life on RENT. now poor people are become more poor and RICHES become more RICH.

    This parameters have been SET the RULING authorities in pakistan.

    if you want home for your children then go abroad from pakistan otherwise their is no HOPE !!!!

  5. mir arif yakub

    on   said 

    i take this opportunity to introduce a new area in karachi which is attracting a lot of attention , dozens of highrising apartment buildings are sprouting up, some near completion while others with structure complete and gearing up for finishing. this is the jinnah avenue,besides malir cantt and accacia golf course. the area is about 2 kms from karachi airport and as such prime area for investment. jinnah avenue is also the link road between shahrahe faisal and superhighway and the main artery for traffic flow to mega projects like bahria town karachi and dha city.all leading builders of karachi like saima, falaknaz,sohni,al asr, fatima etc have a number of projects in the area. property prices are increasing at phenomenal rates in the projects as well as socities like tipu sultan etc.this area is destined to be the new KDA Scheme No 1 of karachi. While kda no 1 is the first housing area on right of airport, jinnah avenue is the closest on left of airport.
    All those requiring further reasons to invest here or information may feel free to contact me on
    zero three hundred two six seven one seven nine nine

  6. YOUSUF LODHI

    on   said 

    GHAR47

    IF SOMEONE WANTS TO AVAIL TAX AMNESTY SCHEME TO WHITEN HIS UNDECLARED MONEY BY PAYING 3% PRESCRIBED TAX, WHAT IS THE PROCEDURE ???? IS THERE ANY SPECIFIC FORM/CHALLAN GIVEN BY FBR THRU WHICH THE MONEY IS TO BE PAID ??????

    PLEASE COMMENT

    • YOUSUF LODHI
      You don’t need to apply
      You just need to buy property, FBR will send you tax details
      Or even if you have purchased property in Past just wait for FBR letter of taxes

      The letter will ask question about source of income and if you cannot show then you have to pay 3 % tax.

  7. I have booked apartment in Karachi KDA Scheme 1 in Saima Twin Tower Project
    Would you please guide me about current and future trend of KDA Scheme 1 area in Karachi should I hold or sell it?

    Best Regards
    Ali

    • Ali
      KDA Scheme #1 Karachi is centrally located in the City
      Central location is always great for properties as most properties are hot cake

      Central location properties and especially flats have strong resistance against price fall. So in long run even in case of price crash you will not loose much.
      But you will get good reward if you sell it after completion date December 2017.

      • Thank you for the advise, Much Appreciated!

        I am following your website and good discussions on real estate market

        Regards
        Ali

  8. Shamsher ali

    on   said 

    What are the prince trends in Bahria Lahore. People tell about new bahria project in Lahore?

      • Overseas

        on   said 

        Being a commen citizen I am required to think to buy a home according to my budget. If my budget allows me to buy a house in DHA I should go ahead and if not than to proceed towards area accordingly. I have been reading many comments where people blame investors or realtors to be responsible for price hike of properties. Here I say everyone has a rights to move for bread and butter. Whats wrong in it if someone invest and earn something out of it. Who the hell has put a gun on head of a commen citizen like me towards thinking of buying a home in posh area having less money. Having not enough money in hand does not justify myself to blame invstors/realtors/Govt fr taxes for making me deprived of expensive house. There are overseas Pakistanis who work hard over the years and buy expensive properties according to their savings. Whats wrong in it. So blaming is unjustified. Buy according to budget. Every kind of propery is available in the market. No one is justified on saying that buying a house is not in reach of a commen citizen, infact buying a property is not in reach in posh area only . Therefore I am buying a dreamhouse in an area wch is away from posh area and I am happy with it.

    • M Rizwan Saleem
      It will take time
      Market is shifting towards fair value
      This will take time
      In future market value will be dictated by genuine buyers and need to live rather than investments

      • Not sure about the govt but Pakistani people are very rich people, stagnant doesn’t seem to be the case even at this time, prices will keep going up per se pak economy.

  9. YOUSUF LODHI

    on   said 

    In Karachi, quite surprisingly, there is a great activity in areas that come under category 4 and 5 of FBR table such as scheme 33 and 45. Prices are gone up and not many deals are getting confirmed. I purchased a plot of 240 square yard for a price of 61-lac 3 weeks ago…..and…..the second one for a price of 65 lac 2 days ago.

    Same thing is happening in DHA Phase 8. Before amnesty scheme, a plot of 150 yard was available at 250-lac but now can not find it even at a price of 340-lac. It seems really funny. Where is the price fall in Karachi ??????

    • rizwan

      on   said 

      PRICES ARE RISING EXPONENTIALLY IN KARACHI …THERE IS NO FALL… NOONE CAN BUY A HOME OR A PLOT NOT EVEN TOUCH A HOME …THE PRICES ARE SKY ROCKETING

  10. Rana Waheed

    on   said 

    Pakistan property market is almost dead. I am estate agent in DHA Lahore. Never seen such a slump in my 20 years career life.

  11. Abdullah

    on   said 

    Investor are out of market. Investor are waiting for the right moment. Many investor told me that they think amnesty scheme is trap. Some say they will wait till the result of pre bargain and panama case. Hope panama case is in favor of NS other wise property price will fall 40 percent.

  12. Rahim Azam

    on   said 

    Market is almost dead
    I have estate in Karachi. Sellers have recently increased the prices but still no buyers. But people have excitement about Gwadar.

Comments are closed.