Real estate aftershocks due to Panama Case Decision
Panama Case Decision has started new era of Pakistan as a corruption free nation. It will also impact the real estate sector which is mostly dependent on black money. Due to the huge influx of black money in Pakistan, property prices are abnormally high. Let’s discuss the real estate aftershocks due to Panama Case Decision.
Property prices will fall due to the ruthless crackdown on black money
After Panama Case Decision, mega corruption cases and property scams are also under investigation. A ruthless crack down on black money is underway at the moment. Many housing schemes are under investigation as in many cases land was unlawfully acquired. When black money is out, who will buy the luxury properties? Without black money, property prices will fall.
Winners and losers
There will be winners and losers due to property price fall. General public and honest tax payers are the biggest winners as they will get cheap properties. On the other hand investors, who just recently bought the properties, will be the biggest losers. Estate agents will also hit hard as their income will be slashed due to low volume of transactions.
Which areas will be hit hard?
There are most probably three case scenarios; stagnation, low price fall and high price fall. Areas where empty plots are more than houses and speculation is high, property price fall will be more severe. On the other hand where speculation is less and so are empty plots, property crash will have less impact on prices. The areas where property prices are below 1 crore, we will see long stagnation due to strong demand.
How much property price fall is expected?
Pakistan property price crash is a must to match the affordability of general public. Either we will see hard crash like 35-50% price fall or long stagnation. Combination of both hard crash and long stagnation is also a possibility. This combination is not new as Dubai real estate prices are still 30% below the pre-crash level of 2008.