Pakistan property market is crashing now | Property prices are falling | Bursting of Real estate bubble
Pakistan real estate sector was in bubble phase as the property prices were highly unaffordable. High property prices were only due to the massive influx of black money. But after Panama Case Decision, investment in reality sector has decreased as no one can dare to acquire assets beyond means. Due to which real estate bubble has collapsed and property prices are falling. NAB is also investigating illegal housing schemes & land grabbing nationwide. As Pakistan property market is crashing now, let’s see its effects.
Buyers, sellers & realtors
There are no buyers in the market but just the desperate sellers. Sellers want to sell their properties at any cost to avoid more losses. Buyers are waiting for the more price fall so that they can buy properties at record low price. Real estate agents are closing their agencies due to low sale volume. The only income of realtors is the commission from renting out properties.
Property price fall
Property prices are falling in all major cities of Pakistan. At the moment property prices are 15-20% down from the peak in early 2017. But price fall is not same in every area. Price fall is more in the areas where day trading and speculation was high. Similarly high end properties are hit hard whereas properties worth up to 10 million are just witnessing the price stagnation.
How much price fall is expected?
It’s the simple formula, bigger the property bubble greater the price crash. As property prices were highly unaffordable in Pakistan so crash will be hard. We will see 35-50% price crash followed by long stagnation. This is not strange as property prices in Dubai are still 30% lower than the peak of 2008. So we will see hard crash and then long price stagnation.
When real estate prices will bottom out?
It always takes lot of time for property prices to bottom out. High property prices were due to the high affordability of people with black money, but honest tax payers have low affordability. Prices will fall to the level where honest tax payers can afford to buy properties. The process of bottoming out of property prices with take months to complete.