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Real estate aftershocks due to Panama Case Decision

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.

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(41) Comments

  1. Shahzad

    on   said 

    Thank you for the valuable feedback. I am living in middle east and want to invest this month during my visit to Pakistan. You have referred few societies near new isb airport but are under developed. Can you suggest any society in rwp/isb which is safe for 4-5 million investment currently keeping in view if their rates are realistic. Please do advice for the ones where development is either done or in progress with good pace, thank you.

    Regards.

    Reply
  2. RIZWAN

    on   said 

    ATTENTION FOR ALL THOSE WHO ARE BUYING PROPERTIES AND DOING PROPERTY TRADING THIS IS WHAT IS HAPPENING..
    DEAR GHAR 47 FOR YOUR REFERENCE

    IRS initiates campaign targeting individuals involved in concealment of wealth, money laundering
    BY MASHHUD (CUSTOMNEWS.PK) AUGUST 2, 2017 UNCATEGORIZED
    KARACHI: Inland Revenue Intelligence & Investigation (I&I) has initiated a crackdown against individuals including property traders, importers, school owners and cloth designers who have been fraudulently concealing their income to evade government revenue.

    Directorate of Inland Revenue Intelligence & Investigation has lodged a complaint before the Court against one Usman Shahid s/o Shahid Zaki for concealment of income, furnishing inaccurate particulars of income/wealth and money laundering.

    According to the report, Usman Shahid S/o Shahid Zaki who is also holder of NICOP i.e National Identity Card for Overseas Pakistanis exhibiting USA as his country of stay has been doing business with name and style of “Southern Distributors” & “Southern Investment”.

    Deputy Director Asif Abro is investigating a money laundering case in respect of Usman Shahid on the ground that the suspect knowingly and willfully made offences of Concealment of Income, Acquiring Assets from proceeds of crime by committing predicate offence of tax evasion whose quantum is above Rs576 million as per preliminary investigation from available record.

    In addition to that, Usman Shahid submitted inaccurate and wrong particulars to Federal Government in his Income Tax Returns filed for 2011-2012; 2012-2013; 2013-2014; 2014-2015 and 2015-2016. He has concealed his true revenue and income from Government with intention of evading due tax.

    His declared figures do not match with his actual figures when probed. Thus, he has betrayed the trust reposed in him as a taxpayer and citizen by Federal Government of Pakistan.

    Usman Shahid did not file Income Tax Return for the Tax Year 2012-2013. Hence, he did not fulfill his statutory duty of filing tax returns for the tax year 2013. On the other hand, Usman Shahid has purchased six expensive properties in DHA Karachi.

    In his returns for 2013-14, Usman submitted inaccurate particulars declaring revenue receipts of Rs1.516 million while a sum of Rs50.639 million was credited in his bank accounts during the period. In his returns for 2014-15, Usman submitted inaccurate particulars declaring revenue receipts of Rs2.405 million while a sum of Rs232.48 million was credited in his bank accounts during the period. In his returns for 2015-16, Usman submitted inaccurate particulars declaring revenue receipts of Rs2.56 million while a sum of Rs1.368 billion was credited in his bank accounts during the period. The accused also purchased expensive properties during these years.

    It is obvious from the above-mentioned facts, Usman Shahid S/o Shahid Zaki inflicted a loss of Rs576.5 million approximately to the national exchequer.

    Reply
        • RIZWAN
          Many thanks for sharing the valuable information and what is happening in Pakistan
          THIS IS THE REAL NAYA PAKISTAN, no place for tax evaders

          LOOKS LIKE THE END OF PROPERTY TAX AMNESTY SCHEME & PLEA-BARGAIN CULTURE
          When Mian sb & Khan sb are not given amnesty scheme option for their flats in SC, then why ordinary people should be given the opportunity to pay 3% extra tax to white the black money. TOTALLY NONSENSE.
          As I have mentioned in many blogs and comments that ruthless crackdown on black money is under way.
          WHAT IS THE DEFINITION OF ASSETS BEYOND RESOURCES
          Click on the below link to find;
          http://ghar47.com/2017/07/06/how-much-house-can-you-afford/

          Reply
        • RIZWAN
          Pakistan economy is in dangerous territory. When economy is down, property price is also low.
          I have mentioned many times about the bad economic condition of Middle Eastern countries and its impact on property prices as most property buyers are expatiates.

          THE FIRST HAND EXPERIENCE OF MR. HUSSAIN FROM SAUDI ARABIA

          ‘I am overseas Pakistani living in Saudi Arabia, from the last three to four year Saudi economy is very low & lot of companies closed. Most of the Pakistani people already left the Saudi Arabia. Now recently Saudi govt. also apply fee on expatriates dependent @100 SR per year and will be increased by 100 SR in coming years For Example if one person having 3 children and wife he have to pay 4800 SR in year 2017, 9600 SR in year 2018, 14400 SR in year 2019 & 19200 SR in year 2020. They also increased exit re-entry fee it was before 200 SR, now 100 SR for each month. Most of the people are not able to afford to keep their dependent and sending them home countries.
          Therefore a lot of Pakistan families are now moving to Pakistan. It will affect the Pakistani economy too. The remittances of Pakistan will decrease and it will increase the unemployment too. If the Pakistan government not control the money laundering, black money & not improve their justice system. It will be disaster for Pakistan. The people living behind their means must be accountable otherwise property prices will not decrease which will create more problems for most of people. The Pakistani establishment & judiciary must take necessary steps to control the money laundering otherwise it will be disaster for our country. Allah Tallah save our country from such peoples.’

          Reply
    • RIZWAN
      This is the developing storey. On the orders of SC, black money is being scrutinized in Pakistan and also abroad. Its clear now that one can buy assets beyond their income. So people with black money are in trouble.
      When black money is out of REAL ESTATE SECTOR, we will see massive property price crash. At the moment we can see stagnant property market where asking prices is decreasing day by day. Within one year, we will see at-least 50% property prices crash of expensive properties followed by many years of stagnation.

      Reply
  3. ZAHID ALI

    on   said 

    What is the difference between land affidavit and land allocation in DHA Bahawalpur files? Ghar 47 please explain

    Reply
    • ZAHID ALI
      Affidavit file is like stamp paper and can be transferred without visiting DHA office. Allocation file is like plots and for transfer you have to visit the DHA office. Allocation file and plot has also small difference. Allocation file has file number but not the plot number.

      Reply
        • ZAHID ALI
          Yes it is verified by DHA
          The seller will submit the Affidavit File in DHA along with the transfer fee, requesting to transfer the File in your favor and DHA will issue the receipt/voucher to confirm it.

          Reply
  4. Ahmad

    on   said 

    Hi

    First of all, i would like to thankyou for sharing such a great analysis and i really admire you views.

    But what are your thoughts regarding areas surrounding by ring road, especially the Defence Road, property rates in societies around defence road ( dha rahber, lake city, royal residencia etc ) these and many other societies which fall somewhere nearer to RingRoad there prices are touching the sky.

    RingRoad will be inaugurated on 14 August, do you think property prices crash in ring road surroundings ?

    Thanks

    Reply
    • Ahmad
      History of Ring Road and any other development is that that uplift the property prices in near by areas. If we see the prices of the areas near to northern loop of Lahore Ring Road we can see sharp price rise. But in case of southern loop of Lahore Ring Road price are subdued. In other worlds, Southern loop of Lahore Ring Road has failed to up lift the stagnant property market of LAHORE. Every one expected that start of work on LRR will uplift the property prices in areas near to LRR but it did not happened.
      There are two possible cases. Firstly, due to LRR prices will be stagnant in this area and may not rise much. Secondly, price fall happens but not as sharp as in other areas of Lahore.
      LRR will definitely uplift the property price but may take years. Like 4-5 years when area is populated.

      WHY PROPERTY PRICES ARE FALLING?
      Economic meltdown of middle eastern countries
      Political turmoil in Pakistan
      Crack down on black money
      In PAKISTAN property prices are very high due to black money. Without black money prices will fall. In areas near to LRR I forecast stagnant property prices for long time or less price fall as compared to other areas. When no one is investing in areas near to LRR so prices will not rise.
      But areas near to LRR are hot for long term investments like 4-5. Rising population will increase the demand and good infrastructure development will increase the prices but may take bit longer than we expect.
      THIS IS THE BIGGEST PROPERTY PRICE CRASH IN HISTORY OF PAKISTAN.

      Reply
      • Ahmad

        on   said 

        Great! but in which areas do you think prices will crash — up till now or even in a coming year I am not seeing any kind of prices crashes in Lahore, like in DHA, Defence Road socities ( Lake City, Ip Town, DHA 11, NesPak etc have the RingRoad factor ) so I am not sure at places you are talking about where prices will fall.

        And was your website down few days back ? I was trying to reach it but was getting error.

        Thanks

        Reply
        • Ahmad
          Yes site was down due to internet and hosting issues
          Prices will crash in the areas;
          1- Where property prices are abnormally high like DHA & some sector of Bahria Town
          2- Where there are no end users like people who will build homes for living but for speculation
          Properties worth up to 40 LAC will see less price fall effects as their demand is strong
          But properties above 1 crore rupees will not find the buyers with white money.
          Already DHA Homes are expensive and no buyer is interested to buy these houses
          Same will be true with other areas

          Reply
  5. Nazish fatima

    on   said 

    Sir
    Reference of the local and international news paper and views of analyst that the charges of PM is quite very low level it is quite a mistake .. If you do business then this kind of practice happen. THIS IS NOT A CURRUPTION. .. COMISSION…KICS BACKS … OR ANY UNDERTABLE dealings

    You are saying that property prices come down by chasing black money of SC. But the decision of SC is become very controversal… it is very hard to convince any one by himself.The judgement piller is weak and BELEIVE system of mind is not accepting it??
    Every qualified person have access internet and the world analysis is on finger tips.

    So how could property prices will come down…. and you know in court their is a long time have required to finalised any of decision..

    SC did not find out any black money from PM ???

    Reply
    • Nazish Fatima
      Panama Case Decision by SC is not against a single person but against all people who have black money or have bought properties with black money.
      International media has praised this decision and many international watch group have hailed it.
      We should not move to controversies. By the decision of SC, there is widespread feeling that justice can be delivered in Pakistan. NO ONE IS ABOVE THE LAW. Rich and poor are equal.
      REAL ESTATE PRICES
      SC and NAB are currently investigating the mega corruption cases and ruthless crackdown on black money is underway. In Pakistan high property prices are just because of black money. So without black money prices will fall. At the moment property market is stagnant as black money investment has stopped in Pakistan.
      In near future we will see sharp decline in property prices followed by many years of stagnation. Now only genuine buyers / honest tax payers will buy the properties.
      REAL BUYERS ARE THE BIGGEST WINNERS AS THEY WILL BE ABLE TO BUY CHEAP PROPERTIES. Just wait and see.

      Reply
  6. DHA Estate Agent

    on   said 

    Lagta ha kuch ziada he asar ho gaya ha Panama Paper Case Decision ka. Market tu bilkul dead ho gaye ha. In DHA Lahore market bahoot down aa gaye ha. 3 din se no calls our no client interest.
    Properties bahoot hain lakin buyer nahin ha. Lagta ha ke sab ronak kale dhan ke thee. Age tu halat shayed es se bhee bure hoon. Mere bahoot dost ghar our cars sell kar chuke hain. Yeh sach k ha ke market bahoot down ha.

    Reply
    • DHA Estate Agent
      Its true real estate market is down and its now only due to Panama Case Decision and political turmoil after this. I had described this before. SC and NAB is investigating other corruption cases. Most of the corruption cases are related to black money, money laundering and real estate scams.
      DHA market is down and so are other areas. Property dealers are hit hard and many dealers have closed their offices. Yes in recent months many estate agents have sustained huge losses and have sold their cars and homes to return money to investors. Stories of riches to rags are common in estate agents.
      This property stagnation will continue for many years. Property market will only work when property prices will come down to an affordable level. At the moment property prices are very high and out of the reach of people with white money.

      Reply
      • ZAHID ALI

        on   said 

        I don’t understand, why estate agents are selling their cars and homes. Estate Agents usually works on commission. If the market is dead then they will not get commission, but how they are in loss. If they are purchasing their own properties then they are not agents rather they are investors. Ghar47 please explain

        Reply
        • ZAHID ALI
          This is the harsh reality of Pakistan reality sector and especially greed of estate agents. There are many professional estate agents. But most estate agents always go after get rich schemes. I know many estate agents who are professionals and told me that even after crash of 2005, their income was low but they survived as they only deal sale and purchase and rent queries. They were not investors.
          But many estate agents invest money in sharing. Like buying properties in partnership which is very risk. When property is down they sustain heavy losses and have to sale cars and homes.
          Secondly, due to abnormally high income, estate agents have luxury lifestyle and they cannot step back to normal one so to keep it up they sell homes and move to rents.

          Reply
          • ZAHID ALI
            Life is not a single event but a process. Progress in life should be steady instead of luck by double sixes of dice. I always say that property investment definitely brings riches but its long term investment. Always invest for at least 4-5 years to get good benefits. People who lost their life savings are one who had short term property investment plans, which is totally wrong.

  7. Muhammad azeem yddin

    on   said 

    dear sir

    To day the stock market did not slip !!!!

    Today story is not a small history ????

    your prediction is to come down about 50% property crash.

    sir .. kindly analysis your views once again … the people who are handle stock market is the same kind of people who are doing speculation / monopolization real estate market.

    should still you think property prices come down ??

    The charges of PM as described by PML leader in TV.. if you analysis any of politician will be same… I am not defending any person.. nor I belong any political party.

    Being a neutral person… it is not a concrete evidence to send a PM home. And I hope so few years later nawas sharif will become more popular than today !!

    Reply
    • Muhammad Azeem Yddin

      1- This case and decision is not against a single person but against all those who have looted this nation. Judges have made it clear that no one is above law. We will very soon see arrests and 3,000 more corruption cases. Operation clean up against black money is in full swing.

      2- Many estate agents are happy that political turmoil has ended and now property market will uptick soon. Totally wrong. Now corruption cases have been opened so all people with black money are trapped. No escape. So party has just started.

      3- Yes, property prices will crash by 35-50% and will be followed by 4-5 years of stagnation. Every one will be questioned about properties and source of income. So end of plea-bargain culture in Pakistan. When black money is out prices will only fall.

      4- This will be the biggest property price crash in history of Pakistan.

      5- The real winners are the genuine home buyers and honest tax payers who will be able to buy properties at low rates. Just wait for few more months. Even at the moment there are more properties than buyers.

      Reply
      • shahbaz

        on   said 

        i am not agree with your analysis, due to ring road southern loop property prices are increasing on monthly basis near the proposed interchanges, for instance i was offered a property in 55lac 1 year earlier and that same property i cannot even get by offering 75lac now.
        its just your speculations.

        Reply
  8. Saher Muneer

    on   said 

    GHAR47 you made it. its you who kept the hopes of honest tax payers alive. We were really very disappointed.
    As per supreme court thousands of corruption cases will be opened and money and propetty beyond income surces will be recovered.
    Please tell how much price will fall.
    Thanks

    Reply
    • Saher Muneer
      Many thanks
      Its true that SC and other departments are investigating the corruption cases in Pakistan. Most of the money is parked in stocks and real estate sector. Every penny will be recovered. We will see the havoc in big housing schemes.
      HOW MUCH PROPERTY PRICES WILL FALL?
      To my understanding it will be the biggest property crash in history of Pakistan as first time black money in checked. I personally see 35-50% price crash followed by 4-5 years of stagnation.

      Reply
  9. Aalia Shehzad

    on   said 

    Supreme Court has made history as now no one is above law in Pakistan.
    How long it will take to complete the process of property crash?

    Reply
    • Aalia Shehzad
      Its true
      Historically, countries were built created by generals/conquerors and made great by kings/politicians. But PAKISTAN is the only nation in world history which was created by a LAWYER and made great by the JUDGES.
      Today Pakistan has started its journey to be one of the most powerful nations.
      SC has opened other mega corruption cases. Now everyone will be scrutinized to show their income versus assets which in not good thing for people with black money. Now black money will be chased everywhere in Pakistan. Without black money property prices will crash in Pakistan.
      It will take few more months before the property price crash is complete but this will be the biggest property price crash in history of Pakistan.
      The real winners are honest tax payers.

      Reply
      • shahbaz

        on   said 

        in my opinion its a biased decision by supreme court, if ppp zardari the most corrupt person had completed his 5 years tenure just because he was in his limits and not cross the establishment. tell me one politician who has not done corruption in pakistan. so there must be accountability for all of them not just one person.

        Reply
  10. RIZWAN

    on   said 

    in sha ALLAH hope prices fall to a gr8 extent so everyone can buy a home….although dunno whether panama decision will have any impact on it or not

    Reply
    • RIZWAN
      Its just the beginning
      Within few days you will see the discussion of mega corruption cases
      Now on word no one will dare to buy property with black money
      This is black day for the people with black money
      This is the day of celebration for PATRIOTS AND HONEST TAX PAYERS

      Without black money prices will only fall.
      Who can buy property so expensive without black money?
      In shaa ALLAH this will be the biggest property crash in history of Pakistan even bigger than that of 2005
      CONGRATULATIONS TO ALL HONEST TAX PAYERS & genuine buyers
      END OF SATTA CULTURE IN PAKISTAN REALITY SECTOR

      Now prices will be dictated by genuine buyers rather than people with black money

      Reply
      • RIZWAN

        on   said 

        IN SHA ALLAH MAY THIS BE THE START OF GENUINE BUYERS BUYING HOMES AT LOW RATES RATHER THAN LIVING ON RENTS AND GIVING THEIR ALL HARD EARN MONEY TO HIGH RENTS….HOPE THE SELLING OF PLOTS AND HOUSES START AT LOWER RATES NOW

        Reply

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