Impact of Panama Case on real estate sector
HIM Emperor Jahangir;
‘World is conquered by sword but ruled by pen. No nation can survive without justice’.
Honorable SUPREME COURT OF PAKISTAN has announced its decision about Panama Case and everyone knows the outcome. We just need to discuss the impact of Panama case on real estate sector.
Crackdown on black money
Panama case decision has loudly announced the direction of Pakistan as a corruption free nation. What we will see in the coming day or weeks is the end of plea bargain culture and crack down on black money. Now onward, no one will be able to park black money in real estate sector. The nation is fed up now, people with black money can buy luxury properties but honest tax payers are unable to buy even small houses.
Property prices will fall
The biggest effect of Panama case will be on property prices. Everyone knows that property prices were crashing in Pakistan after budget 2016. Prices just stopped declining after the introduction of property tax amnesty scheme. Now crackdown on the black money is evident, so who will dare to buy property with black money? In the absence of black money, property prices will crash.
Genuine home buyers are at advantage
Genuine home buyers were forced away from the property market due to abnormally high property prices. Now due to crackdown on black money, property prices will fall. This will be the time when genuine home buyers will be able to buy properties on affordable prices. But genuine buyers have to wait few months as price drop will take some time.
End of SATTA culture
Pakistan property market was high jacked by land mafia. Land mafia was the main reason behind abnormally high property prices in Pakistan. But now property prices will be dictated by the genuine home buyers with much less buying power. In other words, property prices will be now dictated by real demand rather than artificial demand due to influx of black money.
Cheap properties will be price crash resilient
Target of black money is the top societies with expensive properties not the small or cheap properties. Cheap properties always have high demand as genuine home buyers purchase these properties for living. Therefore prices will not fall in Gwadar as property prices are affordable as compared to other cities. Property worth 10 million or less will be price crash resilient. In short, luxury property price will fall. Prices will also fall in societies where speculation is high.