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Ruthless Accountability has crashed Property Market

Ruthless Accountability has Crashed Property Market

Pakistan was perhaps the only nation where corruption was the mark of success whereas honesty always led to degradation. But things have started moving in the right direction as SC and NAB have started the ruthless accountability. Now everyone will be questioned about the source of income as no one can hoard assets beyond means. This move has huge impact on real estate sector. Let’s see how Ruthless Accountability has Crashed Property Market.

Crack down on black money

Black money has been blocked from reality sector due to the ruthless accountability. Now people with black money cannot buy property as they will be asked about the source of income. Due to the low investment in reality sector, property prices are falling. Sellers are reducing the asking price but still no buyers in the market. Luxury property is the real victim as owners want to sell immediately to minimize the losses.

Dubai property sector describes the effects of black money crackdown

Everyone knows that its not easy to park the illegal money in any country due to the New Amnesty International Laws. Dubai reality sector is the biggest victim of those new laws. Dubai and London reality sector was famous among the top black money heavens. Due to latest international laws about black money, Dubai real estate has crashed to a level never seen in any other part of the world. Property prices in Dubai are just 25% of what they were in 2008. Pakistan will see the Dubai style property market crash where prices will be stagnant for years after the crash.

International real estate markets trends

The world is known as global village where one event leads to another. So markets rise and fall together. The American sub-prime mortgage crisis started the worldwide house price crash. Many experts say that property market has global connections as property price rise in one region results in the global property price rise and vice versa. Currently property prices are falling from Sydney to New York. The situation is same in Pakistan as property prices are falling. But Pakistan will be the worst hit market as now black-money can’t enter the reality sector.

Effects of the construction of 5 million affordable homes

First time in history of Pakistan the government looks serious to solve the real issues. The government has already started working on the construction of 5 million affordable homes for the people who are homeless or living on high rents. This is why mafia is against the new government as their hold on property sector is losing. According to NAB there are 1000’s of illegal housing schemes in Pakistan. Why people buy expensive homes in illegal societies when government is building affordable homes that will be available on less price than the open market.

Situation of dealers, buyers and sellers as ruthless accountability has crashed property market

Realtors views about Pakistan Real Estate Market Situation:

According to the real estate agents this is the most busy time of the year as foreign Pakistanis visit homeland during summer holidays. Pakistani expatriates also invest in reality sector. But this year is very different as most expatriates are just observing the market which is falling day by day. Property dealers say that zero tolerance for black money and 5 million rupees buying restriction for non fillers are the major causes of the mess. Many dealers are living hand to mouth because of record low real estate transactions in 2018. Approximately 40% real estate agents have closed their agencies.

Buyers views about Pakistan Real Estate Market Situation:

Buyers are in the driving seat. Most buyers and investors are in touch with the market and regularly checking the prices. Buyers know that market is down so they are not in hurry. They want the market to bottom out first so they don’t lose any money. Buyers are making the low offers so that they can buy property only on the investors rates. This situation is because properties are more in the market as compared to the buyers.

Sellers views about Pakistan Real Estate Market Situation:

There are the two type of sellers in the market; experienced sellers and inexperienced sellers. Experienced sellers have seen the property crash of 2005-6. Therefore they have reduced the prices to sell property as early as possible. Even some are happy to sustain the loses. But on the other hand inexperienced sellers want to sell property at some profit which is not happening in the near future. Another real issue of the sellers is the low offers and inquiries as non filers are not interested to invest black money in reality sector. Everyone knows that black money will be chased to hell.

How Pakistan property market will behave?

Forget about the 5 million property buying restrictions and focus on who can buy property in Pakistan. Pakistani state was nearly destroyed by the nexus of corrupt people and property mafia. This resulted in heating the property prices. But now things have changed as no one can dare to buy the property with black money. This new trends will totally crash the high end market that survived on black money. So small size affordable properties will be in high demand.

Pakistan real estate price trends

Property prices are continually falling since 2016. Now prices are approximately 30% down from peak of 2016. But this is not the end of story. Prices are heading towards another 30-40% crash. Total price crash from peak of 2016 will be 60-70%. There is no real demand since 2012 as price rise was just due to the massive black-money investment. New government has zero tolerance for black-money so we can already see the death of luxury property market in Pakistan. Property prices will go back to the level of 2012/13. But small properties will be in good demand due to affordable prices.

Best time to buy property in Pakistan

The wait to buy property is not over as real estate prices are still falling. It will take some time for property prices to be bottomed out. This will be the time to start buying, as genuine buyers will get the record low price offers. Property crash always takes some time to complete as it’s a slow process. Hopefully prices will bottom out by the end of this year or the start of next year.

Recommended:
Impact of budget on Pakistan real estate sector

210 Comments

  1. Farooq Lari

    on   said 

    Dear Malik sb
    You are quoting example of Al-Kabir Town phase 2 on a number of occasions. Firstly, a fairly new name like Al-Kabir Town cannot be compared with established societies namely DHA, Lake City, Bahria etc. Secondly, Al-Kabir Town phase 2 is mostly files and undeveloped and it is a cyclical trend of ups and downs in the file business. In my office, 3 of my colleagues have been biting the dust to get property at low rates but none of them is successful yet for the past 2 months. It is entirely dealers’ game and also I am a keen follower of your blogs and wish for the property market to adjust to Pakistan’s income level. But the truth is it is not happening. The property price which has doubled since year 2013 goes down by few lakhs in certain areas does not give a big dent to investor. Rest Allah knows better.

    Reply
    • Zahid Ali
      Since the launch of NAYA PAKISTAN HOUSING PROGRAM, private housing schemes are under pressure. Naya Pakistan Housing Scheme will be launched in Lahore by 1 January 2019 but it has reduced the prices of many housing schemes, Al-Kabir Town that was selling at 2 LAC Own is now in minus. Why people buy expensive plots when at the same price they can buy government affordable homes.

      Reply
  2. Malik Anwar Sb:

    I am a regular reader of your blog because it gives me many hopes.

    I am repeating your words. Hopefully, you will not delete my comment.

    Property is the best hedge against inflation

    Property is the best hedge against inflation whatever the period we compare. For example gold price in 2011 was same as is now. But property price has increased by many folds since 2011. This is due to the limited land and high demand for properties. Scarcity of land makes property best hedge against inflation worldwide.

    Source:
    https://www.ghar47.com/2014/06/10/property-is-best-hedge-against-inflation/

    Therefore, as per your sayings, property price will increase by 20 to 30 percent gradually within 1 or 2 years.

    We are facing 30% inflation due to rupee devaluation. And I am already seeing its effect if appearing in property prices.

    I do not want to ruin the hopes of someone. But, it is my prediction that property prices will gradually increase except there is a global economic crisis like 2008.

    Reply
    • Fraz
      1- Its general blog about the behavior of property market.
      2- Property investment is the only sector that provides profit even in recession. HOW? When houses are rented out.
      3- Currently Pakistan reality sector is facing worst case as non filers have been restricted from buying property worth 5 million or more.
      4- Foreign Pakistanis have the restrictions to end money just 21 days before the transaction.

      WHY PROPERTY PRICES ARE FALLING:BLACK MONEY THE REAL ISSUE:
      Because people can’t invest in real estate sector as there is restriction for non filers. DEMAND IS NEAR ZERO FOR LUXURY PROPERTY.
      HOW THIS SITUATION WILL END:
      Prices will be record low till 2022-2023. Then market will adjust as per the purchasing power of the people with white money. They after 5 years we will see a sound property market where prices will start rising gradually but not abnormally.

      Reply
  3. How come everything continues to adjust itself and price decline is nowhere yet to be visible? Is this 40-50% price drop that you forecastef is really expected anytime soon?

    Reply
    • Umer

      Prices are already 40% down from peak of 2016.
      THERE ARE TWO DIFFERENT CASES:
      CASE #1: PROPERTY WORTH LESS THAN 5 MILLION
      The properties worth less than 5 millions have strong demand as non filers can buy so no price fall these properties.
      CASE #2: PROPERTIES WORTH MORE THAN 5 MILLION OR LUXURY REAL ESTATE
      The luxury properties we see in DHA or other posh areas have zero demand since the approval of mini budget 2018-19 on 3rd of October 2018. The property prices are record low in DHA. Near zero transaction. Its impossible to find a filer buyer for property of DHA.

      DHA Offices across Pakistan are checking the filer status by entering the NICN.
      So even no buyer after reducing the prices. So crash is much harder than we expected.
      Luxury property prices are the biggest victim of Ruthless accountability. Normal 20 MARLA / 500 SQ YARDS house in DHA Karachi, Lahore & Islamabad is from 3.5-12 CRORE. Who has white money to buy these houses. DHA is worst hit as it was a pure black money market.

      WHAT IS THE PAY OF 20/21 GRADE OFFICER IN PAKISTAN. NOT MORE THAN 2 LAC. ANNUAL PAY = 24 LAC
      Universal formula = Home one can buy = annual income x 5 = 1.2 CRORE
      With 1.2 crore only 5 MARLA HOUSE IS AVAILABLE. How government servants are living in luxury properties in Islamabad’s expensive phases. Because of massive corruption.

      Reply
      • muhamamd azeem uddin

        on   said 

        dear Malik sahab,

        Your calculation is right, but ground realities are quite different, i mean still i did not see any price reduction on 500 sq/yard or 120 sq/yard home and plot prices coming down ward trend.

        Pakistan economy is declining gradually and still their is no hope to go up,
        The new govt did not have take up any permanent solution and measures that on this basis manufacturing sector have encourage and people have attract to invest their money.

        This shows that in coming years we see more inflation/ unemployment , high trade defecit and budget defecit.

        IMF also warns that due to increase in interest rate in USA foreign investor will not attract now to invest in emerging market like india and pakistan . They will draw their money convert dollar and invest their own country, that is why we see devaluation rupees in india and stock market also going down.

        But under all calculation it is beyound means and understood WHY PAKISTAN PROPERTY BUBBLE ARE NOT BUSTING.

        property market is still going up in pakistan???

        kindly through light of your views???

        Reply
    • Arooj Siam

      on   said 

      Complete article post by Dawn
      https://www.dawn.com/news/1440441/no-bouncing-back-for-the-property-market-soon

      The stagnant property market does not look likely to recover anytime soon. Realtors and builders do not expect a housing rate slide in the middle-low income areas of urban centres, but they do foresee prices falling in posh areas where the market is driven by investors.

      The volume of activity is next to zilch as investors are driven out while a mismatch of demand and supply keeps deals from materialising.

      In the absence of credible data to show volume it is not possible to quote numbers, but market players projected a 30 per cent fall in the value of plots in high-end localities across all major cities since 2016. The dip is not as pronounced in the housing sector. In middle and low income residential areas rates are said to be almost static — at 2016 level — but the transaction level is low.

      Talking to Dawn, frontline leaders of the real estate and housing sector assert that the right mix of forward looking, stable, policies can gradually improve the situation in the medium term.

      They believe that visible progress at a reasonable pace on Naya Pakistan Housing Scheme can help revitalise the sluggish housing sector. However, abrupt sudden changes in the legal framework and the introduction of the wealth tax would further shrink the market and push businesses towards bankruptcy.

      While the market is still grappling with tax reforms and waiting to see how the government implements the buyback scheme announced in the budget, the key operators dread the reintroduction of wealth tax in the country

      The property market in Pakistan has grown vertically since 1990s, pushing unit price beyond the reach of ordinary people. The promise of quick- high- returns attracted both households and investors to the arena. Besides, the undocumented status made it an ideal destination to park unaccounted wealth.

      Experts believe that over the past decade the persistent improvement in the law and order situation did help sustain the upward swing, particularly in Karachi, but the tax laws and regulations — especially the recent bar on non-filers to operate freely in the market — weigh heavy.

      The impact of exemption promised for certain categories of buyers by the PTI government has yet to be assessed. These measures, though supportive, are not believed to be strong enough to re-energise the market.

      While the market is still grappling with tax reforms and waiting to see how the government implements the buyback scheme announced in the budget, the key operators dread the reintroduction of wealth tax in the country.

      When inquired about the status of any steps related to the property market, Arif Khan, finance secretary, told Dawn that the Federal Board of Revenue (FBR) has been tasked with preparing the implementation plan. “The spirit of the reforms is to improve documentation and plug loopholes in the framework that is being used to evade taxes.”

      Dr Muhammad Iqbal, senior FBR official, told Dawn over phone that the measures announced may take more time before they are notified and implemented. He admitted that the process to establish a directorate or a holding company that will assess and acquire under-declared assets has yet to start. He mentioned lack of capacity and budget for the mammoth task. Dr Iqbal regretted that the provinces did not heed the federal government’s advice to do away with DC rates.

      Proponents of documentations have long been demanding proper regularisation of the property business. Keeping opaqueness of the local property market in view, atleast one foreign bank has not been entertaining clients who wish to deposit funds from property sales proceeds into their accounts.

      Besides multilateral donors, financial monitors such as the visiting team of the Asia Pacific Group last week, reportedly identified loopholes in the legislation in real estate brokerages where they observed large business transactions remained unrecorded.

      To reform the property market the previous government, in its May 2018-19 budget, announced among other measures, the property buyback scheme to make value assessment realistic. It announced abolishing FBR rates, urged the provinces to shun the DC rates and barred non-filers from buying property exceeding a value of Rs4 million. At the federal level, a flat tax at the rate of one per cent was levied on the declared value of the asset.

      Under the buyback scheme the government was authorised to buy individual properties within six months of registration for double the declared price in FY18-19, 75pc higher in 2019-20 and 50pc greater in 2020-21 and thereafter.

      The current government maintained the non-filer bar with some exceptions. It revised up the permissible limit on the value of property that non-filers could buy from Rs4m to Rs5m, exempted widows, inheritors and overseas Pakistanis from the tax filer condition if funds to buy property flow in through banking channels.

      Currently, market sources confirmed that sale volumes have crashed so low that viability of small and medium size companies has become difficult. If the situation is allowed to persist, companies will start failing and even relatively bigger companies will be forced to initiate a wide scale retrenchment to control losses.

      What took the wind out of sails of the high flying property market that for the past three decades proved to be a risk-free, highly lucrative investment option in Pakistan?

      Muhammad Hassan Bakshi, chairman, Association of Builders and Developers of Pakistan (ABAD), counted several missteps by the government responsible for market sluggishness.

      “There has not been a single approval for any new project in the city over the past six months. The reason is the abrupt changes in rules and the requirement of attaining NOCs from utilities for registration. He said the Water Commission has declined to issue any NOC. One wonders how personal water needs are linked to the flat or shop that someone owns.

      “The ban has blocked one trillion rupees and I know for a fact that scores of companies are moving towards bankruptcy. Not everyone invested from their pockets. Those who leveraged funds for suspended projects from the market are more vulnerable and in deep stress,” he argued.

      Zeeshan Ali Khan, CEO zameen.com, at an event in Dubai reportedly said that the market has started emitting positive signs post elections. He did not explain the basis of this assessment.

      He reportedly remarked “when tax reforms were introduced in 2016, sales of properties worth over Rs5m had slowed down because they fell under the tax net. But off-plan properties and those priced below Rs5m saw traction.

      “There has been more movement in low-end properties. It was good for the sector because people were flipping properties, which has now stopped,” Mr Khan said. He made a case for a vibrant leasing sector to support the real estate market.

      Published in Dawn, The Business and Finance Weekly, October 22nd, 2018

      Reply
      • M ANWAR

        on   said 

        Dear sir, this is a newspaper story.
        What is actual in market, we do not tel the people.
        Truth is that prices of plots in market are high as compare to previous
        Our dilemma is we did not have the data which can show to readers that what were the prices in previous 5 years and what are now days prices.
        Example is that prices of plots in gulberg isb where the prices are going high and high, then how can we say that market is slow.

        Reply
    • rizwan

      on   said 

      XACTLY AS GHAR47 WAS SAYING….YAHAN PAR KAFI LOG THAY JO MISGUIDE KER RAHAY HAIN K MARKET WILL GO UP IN FUTURE…. AB KIA DAWN BHI GHAR47 K SATH MILA WA HAI KIA? 🙂 AT THE MOMENT BROKERS AND MAFIA IS TRYING ITS BEST TO SUSTAIN THE MARKET AND INCREASE IT ARTIFICIALLY BUT THERE IS NO GENUINE DEMAND IN MARKET

      Reply
      • Rizwan
        Situation is getting worst for real estate agents. Today an estate agent who is working in DHA LAHORE since 1997 told me that he has not seen such a bad situation of the market. According to him its even worst than the crash of 2006-8. He said he has accumulated the debt of 7 LAC because of very low transactions. He also told me that one of his friend who has invested 3 crore in a project on Ferozepur Road Lahore has lost 2.5 crore and the guy has sold out his luxury car and house.

        Reply
  4. Zainab Naqvi

    on   said 

    Hello guys.
    What has happened to the property market
    i am trying to sell 2 Bed DD Flat in Gulistan E Jauhar but no calls.
    Looks something wrong. One property agent told me that market is crashing because of Imran Khan. Is it true or rumour?
    Another dealer told me that he has no sale since BAKRA EID.
    Please guide me as I have already reduced asking price by 25%.
    Salamz.

    Reply
  5. HI,
    Karachi property market is stable, 200 yards double story house prices for 350 to 500 lakhs in North nazimabad or Julistan e jauher.
    My question, how long it would take to see the price decrease. We are waiting since 2016 to buy a house in the above mentioned areas.
    If you compare the prices for 2013 they are more than doubled or triple.
    What a waist of time and money…very sad. shame on housing authority in karachi who help land graber for money, ex MDHA.

    Reply
  6. Ali ahmed

    on   said 

    Hello friends,
    What has happened to the market?
    Last year i bought a plot in DHA Phase 5 Lahore and paid 323 lac for it.
    Now I want to sell. Got 3 calls from OLX and guys say they will buy at 250 lac.
    Market is down or they are playing with me?
    One guy even told me sell at 245 lac otherwise price will fall to 150 lac.
    Looks like something wrong with the market. Here in states market is falling but not as sharp as what people tell me about paki market.
    Hell is falling on the head?

    Reply
    • They are playing low balls. Even they will offer you 1 crore by saying that market is crashed.

      On the other hand, when you will go back to purchase the same plot, you will be surprised that it is selling in 350.

      Contact some dealers and inquire that you want to purchase a plot in your locality. The situation will be cleared.

      Reply
  7. Dear,

    I have gathered data for some of the residential schemes and found it matching with the analysis presented above by some experts in above discussions;

    Islamabad (DHA Phase-2)

    Average price of 1 Kanal Residential plot (Oct/Sep 2018) = 1.78 crore
    Average price of 1 Kanal Residential Plot (Oct/Sep 2017) = 1.96 crore
    % age decrease in price = 10 %

    Average price of 10 Marla Residential plot (Oct/Sep 2018) = 1.18 crore
    Average price of 10 Marla Residential plot (Oct/Sep 2017) = 1.17 crore

    % age increase in price = 1.3 %

    GAWADAR – SANGHAR Housing Society

    Average price of 2 Kanal Residential plot (Oct/Sep 2018) = 0.78 crore
    Average price of 2 Kanal Residential plot (Oct/Sep 2017) = 1.28 crore

    % age decrease in price = 40 %

    Hence my conclusion is that the schemes which are more populated/constructed will have less price drop as compare to schemes having less population/construction. The schemes which are empty (like GAWADAR or Bahria Karachi etc) will hit hard and prices may fall up to 60%, as highlighted in above discussions.

    Also in populated schemes the plots of smaller size (10 marla or less) have/will have either stagnant prices or minor price increase of few percent , as compare to prices of 1 kanal plots showing decrease of 10 % and may have further fall of 10 % during coming year.

    Please correct me if I am wrong.

    Regards
    Asad

    Reply
    • Asad
      Great addition to the the discussion.
      Yes property price fall is not same everywhere.
      Where speculation is high property price fall is also high and vice versa.
      We are moving towards the prices of 2013 from where started the abnormal rise.
      Like DUBAI 70-75% price crash is expected from peak of 2016.

      Reply
    • Rizwan
      I was telling the same since property amnesty scheme was introduced.
      But no one was ready to listen.
      PROPERTY AMNESTY SCHEME WAS A TRAP.
      Ruthless accountability is every where.
      Everyone who bought property of worth even 5 LAC has to answer about the source of income.

      Reply
  8. nazish fatima

    on   said 

    Dear sir,
    kindly read the link, and comments please .

    https://jang.com.pk/news/564772-todays-print

    similarly i regular read your comments and i found that you are very ENTHUSIASTIC and GREAT HOPE for development of NAYA HOUSING SCHEME, but ground reality is not supporting , kindly also read under article and comments please.

    https://jang.com.pk/news/563166-todays-print

    sir every person have their own believe system and according to that people show their attitude.

    but you are not a common man, you are very smart man because people follow your advises.

    i will request to you please check your believe system once again, every time new technology are being coming and we must open our mind to accept it and make our mind flexible. Always you are saying that property market will go down, and now you have started saying new housing will eliminate the prices of property market.

    i am sorry to say that neither property market goes down till today, nor their is any cloud that gives us signal for RAIN. i mean government dont have money to pay the MARK UP , so govt is borrowing money from IMF to pay the mark up otherwise the country will bankrupt.

    in this scenario you are giving hope for low cost housing , as cement , M.S steel bars , block , doors and windows as well as labor and all other material which have required to make a home have already become expensive about 30%. so it is a common sense HOW THIS POSSIBLE AND WHAT WAYS.

    kindly also note that if deliberately we will give false hope to the homeless people then it will RIDICULE with the poor people and nothing else. it is also a sin and one day we will give answer in front of Allah.

    Reply
    • Nazish

      I am 100 percent agreed. Malik Anwar sb is only giving hopes from many years and property prices has been increased in the meantime.

      Malik Anwar sb property will never go back to 2013 price unless there is a hyperinflation like venezuela.

      Please save my predication that property price will further increase due to inflation. The 30% decrese in rupee value will gradually increase the house prices.

      By following your comments, i missed the train of dha 9 town. Plot was 50 lakh last year. Now the same plot is 85 lakh. And my 50 lakh became 35 lakh in 1 year due to rupee devaluation.

      Ms Nazish rightly said that do not misguide. Give the true facts of property market. Do not show dreams like others. Like naya pakistan.

      Ground reality is different. My friend has 15 million in his hand. He is unable to find a 5 marla house in dha 5 lahore from many months. He was also waiting for a good time like me. But his 15 million became 10.5 million now due to 30 percent devaluation of pkr.

      Reply
      • Malik

        on   said 

        Dear fraz… I am telling this guy from almost one year now that he is not property expert, he doesn’t know anything just keeps saying one thing that property w crash like dubai . I told him lot of time that dubai mrkt has no comparison with pak property as dubai real estate was loan based and 90 % expatriates were the investors. When they realized it was going down they left dubai and unfortunately country doesnt have v strong system to catch them from other countries. I am here in dubai from almost 22 yrs now but never invested here even when it was on peak. We knew that it’s loan based market and was not reliable. in Pakistan it’s totally different it’s expected that our population will be doubled in 2030 it means our housing requirements will double in next 10 yrs. Now if you look at.. Naya Pakistan scheme.. Its not covering the requirements of whole community even if it’s hundred prcnt successful. They w give flats only to those who do not have any plot or house on their names..Secondly their houses sizes are max 4_5Marla and only in selected cities. One should b staying in that city as per nadra record can apply. Now in real estate we overseas are the investors and we prefer to have bigger houses of min Kanal. We prefer to stay in repuated societies in DHA so demand of such schemes can not be ruled out. Only it w effect the bogus schemes which will also increase the prices in repuated societies like DHA. Now see prices of plots… Bwp files increased from 25 last year to 34 till now.. Multan also u w see soon in December Jan it w cross 50..dha town from 55to 70 lacs 5 Marla.. Prism increased 10 lacs in 2018. So this is the condition only investors should be smart. Some Properties in Karachi and gawadar decreased due to many other factors including that their values were not justifiable and they lost upto some extent . people should pay the tax and 55% increase in fbr record is noticed. So things w b normal when everyone understands that it is not avoidable.
        Last question is if blogger knows property market will be hit so badly then why he is doing this bussiness till now. ??? There are ataai dealers also like doctors.. So guys be careful and do your own homework instead of just believing bunch of guys who might have vested interest.

        Reply
        • Ahmad

          on   said 

          I am following Malik Anwar sahib since last 1-1.5 years through his blog but i knew citi associates (karachi) since last 7- 8 years and Jakvani sahib is telling the same thing which Malik sahib mentioned in his blog Except one thing that Jakvani sb is optimistic that market will be better after 2-3 years. As far as your analysis is concerned your approach is from buying perspective try to sell property and look how many buyers you will get.
          Cheers

          Reply
  9. Hasan

    on   said 

    There is definitely downward pressure on property and it’s increasing by the day. It has been this way for more than a couple of years now. Of course property market is not one entity all ingredients of which uniformly go up and down. Some values may even rise in a down market.

    We are talking of the general sentiment. And that is down.

    Having said that, yes there are sellers (and dealers) who are continuing to claim that all is well and even raise prices to support their claim. But they are not really selling like crazy, are they? It’s like clapping with one hand i.e. a losing battle. They can keep trying to ‘create’ a picture of robust market but it’s simply not there. If it had been so, there would have been deals right left & center enough to flood DHA offices.

    Two of my relatives have been trying to sell their houses in DHA Karachi for a long time. The prices they had in mind were what used to be the levels back in 2016. Now they cannot believe that there are no offers at all. And finally their exasperated brokers are telling them to bring asking prices down by at least 30%. Even then it’ll be incredibly hard to find legal buyers who are interested at all. Ultimately, if they wish to sell now it’ll have to be at 50% discount of the level attained in 2016. So either they could sell now at a 50% discount or perhaps many years from now at a slightly higher price but due to time value of money it’ll be the same thing. One way or another, they are faced with a 50% discount from levels of 2016.

    In effect it means values are tending back to where they used to be say in 2013. And that is a best case scenario. It might actually turn out to be much worse in which case values would go back to levels of even 2010.

    Some other houses I know of in good DHA locations are already asking prices that prevailed several years ago.

    So the crash seems to have hit older houses more severely. With inflation also factored in, this is a really heavy blow to such properties.

    Regarding brand new constructions, they could only go down up to an extent and not beyond it. Their land acquisition plus raw material costs are significantly higher, if their investments have been made during last 3-4 years.

    However, land too is becoming cheaper. It constitutes the major cost outlay for a project. In the near absence of black money, there are hardly any buyers. The 20% or so legal buyers that do remain are well aware of the state of high value market and are bidding accordingly.

    Here’s a rough sketch of what might be going on:

    Out of 100 owners of high value properties:

    About 40% might have holding power to ride out the down market and not sell
    About 30% might need to sell in near term
    Remaining 30% or so would be somewhere in the middle

    These percentages are not scientific at all. It’s just based on anecdotal evidence.

    As black money holders continue to be squeezed into a corner, more would need to sell out. Given commonly held perception that 80% of high value market is based on black money, then that is really bad news for such properties. It means going forward, a higher & higher percentage would need to sell out in near term.

    Combined with a general down cycle, this creates a lot of pressure on even land values.

    Reply
    • Hasan
      Many thanks for sharing your first hand experience of the market.
      Pakistani real estate sector is facing the historic changes due to the ruthless accountability. REAL ESTATE Sector is worldwide famous for parking the ill-gotten money. But now due to new laws introduced by amnesty international every country has to share the details of investments. How this has worked or affected the markets of different countries. DUBAI is the best example. Dubai was famous to park illegal money or in other words paradise for money launderers. As Dubai is now sharing the information with other countries so it is not a safe heaven for black money. The result is 75% price crash from level seen in 2008.

      PAKISTAN REAL ESTATE FORECAST 2018/19

      Here are the developments that will hugely impact the market;
      1- Economic decline
      2- Depreciating currency
      3- Increasing interest rate (IMF has predicted 14% interest rate by June 2019)
      4- Ruthless crackdown against black money
      5- Non filers can’t buy property worth more than 4 million PKR
      6- People have to answer about the source of income
      7- Foreign Pakistanis have to send money just before 60 days of property purchase
      8- NAB has said that there are approximately 6,000 illegal housing schemes in Pakistan, so people are afraid to buy property in private schemes
      9- Nationwide campaign to demolish the illegal constructions / encroachments
      10- NAYA PAKISTAN Housing PROGRAM will attract the investment

      FUTURE PROPERTY PRICE TRENDS IN PAKISTAN

      We will see massive price fall across Pakistan. Luxury market is the real victim as its very hard to find the buyers who are filers. Pakistani real estate sector will be hit as harder as Dubai property market as both flourished without real demand just because of massive influx of black money. Dubai Property prices peaked in 2008 and massive down in 2018. Pakistani property prices down in 2016 and record low price will be seen by 2019.
      Two different scenarios;
      Properties worth less than 4 million PKR will retain the prices due to strong demand
      But
      Expensive property prices will crash more.
      SO
      Property prices are already 30% down from peak of 2016. We will see another 30-40% price crash. So property prices will crash by 60-70% from peak of 2016. The game has just started.

      Reply
  10. muhammad azeem uddin

    on   said 

    Dear zahid sahab,
    Very nice information have shaired.
    Regarding NAYA LOW COST HOUSING. I dont want to live in DREAM to the all of the reader. i will just request that this project will become same like TEXTILE CITY AND MARBLE CITY.

    Now it depends people how take they seroius about this matter.

    Now what to do : Just try to increase your income and save this money in USD/GOLD/SILVER. or start. any business if possible.

    Reply
    • Zahid Ali
      I remember last time 14% interest rate was during the reign of President Asif Ali Zardari.
      What happened;
      Property prices were record low; average price of 1 Kanal Plot in DHA Lahore was 45 LAC.
      Gold Price doubled due to massive inflation.
      Same days are ahead again.

      Reply
  11. https://www.zameen.com/blog/heres-how-property-prices-fluctuated-in-september-2018.html

    Just today Zameen issued their index of September. Everywhere other than Karachi plots, its show that prices have gone massively up and continue to go up. All those who have been waiting for market crash is still in a lombo. Either data from zameen is questionable or we are waiting time. Not only plots havent gone down in Lahore but on the other hand, price of construction has shoot up so someone who wanted to build his house a year ago for 2 cror might get a plot 5-10 lacs cheaper after crash but by that time,construction cost be 25% higher so wouldnt that be translated as rather a loss?

    need your expert opinion please.

    Reply
    • Umer
      Yesterday there were only 14 file transfers in DHA Lahore, whereas average in 2016 was 180-200 daily filer transfer.
      Dollar is record high.
      Economy is in constant decline.
      Still prices are increasing?
      Every estate agent of DHA Lahore is saying that their income is record low and property prices are 30% down since 2016.
      STRANGE IF STILL PROPERTY PRICES ARE INCREASING.
      BLACK MONEY HAS BEEN BLOCKED
      RESTRICTIONS ON BUYING PROPERTY FOR NON-FILERS
      NEW LAWS FOR OVERSEAS PAKISTANIS
      HOW MANY COMMENTS ON THIS BLOG?
      HAVE THEY ALLOWED YOU TO COMMENT?

      Reply
    • Dear Umer:

      Although their figures are fake but we have to keep in mind that inflation increases house price.

      https://www.investopedia.com/ask/answers/correlation-inflation-houses.asp

      Similarly, the current rupee devaluation will effect house prices. In my opinion houses will be 20% more expensive after 1 year.

      The only exception is a global recession like 2008.

      In the USA and canada, house prices are still increasing regardless of tough mortgage conditions. So i am not seeing a any big global economic crisis in the near future.

      Reply
      • Fraz
        If you see the past trends in Pakistan from 2008-2012, inflation was record high in Pakistan due to massive money printing. Whereas property price was record low 2009-2011.
        So inflation decreases buying power so people invest less in properties.
        See the current example. VENEZUELA has highest inflation in the world whereas no one is buying homes.
        PROPERTY PRICES Rise when massive money is invested in property sector. But now black money is blocked from reality sector.

        Reply
    • rizwan

      on   said 

      lol dear brother umer if u r beleiving the data of zameen website then u r living in a fools paradise… they r part of this mafia , y will they try to show the real picture…. u can count the number of comments on their blogs which is 0 or not more than 1 or 2… everyone now is slowly knowing the agenda of zameen.com ….

      Reply
  12. Ibad

    on   said 

    Property prices will not fall significantly. Non-filers continue to trade properties valuing more than PKR 5 million while declaring that they have brought the property at or below PKR 5 million and paying (evading) taxes accordingly. This has been made possible because of low DC rates that have not been updated in years and/or were set at much lower rates than the market. No authority is looking at the money trail of these transactions.

    A buyer and a seller may have two transaction contracts. One with the actual transaction amount for litigation purposes should something go wrong between the contract and the exchange. The other contract with low trade amount for property transfer and the tax authority. This will give support to the property prices.

    There are approximately 2 million filers and there is no way they can give support to the property market should the new laws are to be enforced in true spirit.

    Reply
    • Ibad
      Black money has been blocked permanently by a simple clause;
      Any person or authority who will attest or register the property for NON-FILERS will have to pay penalty equal to 3% price of property. Why anyone will pay penalty. Authorities will not pass the file of NON-FILER Buyers or they will not transfer property on his/her name.
      Investments totally blocked from reality sector.
      Dollar at 138 PKR.
      This will increase inflation. To control inflation interest rates will shoot up to 12%.
      PAKISTAN REAL ESTATE SECTOR has already crashed.
      Dollar was at 105 now at 138. So investors have already lost 30% of money.
      Pakistan property market will only revive after 5-10 years.

      Reply
      • Malik Sahab,

        Having a certain law and it’s implimentation are two separate things. Property market hasn’t crashed. Given the current property and taxation laws should have caused the property market to crash, had these laws been enforced. I am in the market to buy a property but the market is moving against me with prices rising for the past 6 months and trades happening at higher rates for properties worth more than 5 million.

        Reply
        • M ANWAR

          on   said 

          I AGREED WITH IBAD AS IN REAL, PRICES ARE NOT CRASHED.
          GHAR AND ITS TEAM SHOULD TELL THE PEOPLE TRUTH.
          AS WHEN I GO TO MARKET TO BUY A PROPERTY PRICES BECOMES HIGHER THAN THE PREVIUOS. THEN HOW THERE IS CRASH.

          Reply
      • PS. Ask the brokers as to how trades are being done between non-filers for properties worth more than 5 million. They will give you the details.

        Reply
        • Ibad
          I was in a famous estate agency of DHA Lahore just last night. The guys told me that since the approval of mini budget (on 3rd of October) they haven’t received any calls.
          REASONS;
          1- Firstly anyone who will process or register the transaction of NON-FILER will have to pay penalty equal to 3% price of property.
          2- Secondly Overseas Pakistanis can buy property in Pakistan without filing tax returns but all money should be sent from abroad only before 60 days of the property transaction. In other words bank details must show that whole money was sent in a single transaction just 60 days before the purchase of property.

          These two laws have stalled the real estate transactions.
          Another realtor told me that he went to DHA Office and DHA staff was first checking the status of the buyers as filers and refused to process the transfer for those who were non-filer.
          This is the real change.

          Reply
          • Ibrahim

            on   said 

            Malik SB,

            Penalty is only applicable when the property is registering above Rs.5 million to non filers.

          • Ibrahim
            Agree.
            How many properties in DHA are less than 5 million? 5-10%
            How many properties in Pakistan are under 5 million PKR? 25%
            So 75% of the market is blocked by a single stroke of pen.
            DO YOU THINK PEOPLE WITH BLACK MONEY ARE INTERESTED IN BUYING PROPERTIES LESS THAN 4/5 MILLION PKR?
            ANOTHER THING
            Property can be registered at DC Rate. But buyer has to also declare the real price of the market as per Market Rate. This is necessary to bring the all income/money into tax net and can be declared as white money.

        • Malik

          on   said 

          In real estate especially in DHAs there a investors not the end users and this is not right time to buy in Lahore or pindi or Karachi. Reason is DHA bwp balloting date is already announced and DHA multan is also expected and those who understand the real estate are investing there after ballot of above both again investors w look for Lahore or Dha gujranwala. real estate is Pakistan national game now. in all crisis there remain opportunities, one should be wise enough to cash it.
          Now where dealers are concerned they were playing with innocent investors and looting them with both hands. they were not relying on their commissions but we’re working like mafia and had their life style was like kings same like media. Now they are not getting those.. Khabbay. So thts why they a crying and showing negative picture of mrkt.
          Some people they missed the previous train and now day and night trying to unsettle the real estate mrkt just to grab their chance.
          Some Properties values came down is because they were not realistic and behind them was also this real e mafia who were working as investors and inflated the prices. Now their game is over and they are cursing the market.
          It’s too early to say that Govt.. Apna Ghar.. Scheme will b successful and will replace the current real estate bussiness bkz there are no funds available. Secondly it’s not well planned it can be another. ASHIANA SCHEME.. One can imagine that total houses in Karachi and Lahore are not more than 5 million in last 70 yrs. It means that govt is about to make Karachi and Lahore in 5yrs…. So it’s too early to consider it as replacement.

          Reply
          • Zahid Ali

            on   said 

            Dealers are not showing negative picture of market. Whoever go to dealer and ask for purchasing, dealer always try to paint a rosy picture of market.

            I agree that investors missed the train twice. First time when they didn’t purchase in 2102-2013 and second time when they didn’t sell their property in 2016-2017.

            It is very easy to say that a particular investor took the bad decision in purchasing property in a particular area, after time is passed and lost is evident. But this is not true. In the same area, somebody earning and other is loosing. This apply to every area.

            Most of the dealers are still optimistic and convincing their clients that market will perform in near future. In my opinion, whether Naya Pakistan scheme is successful or unsuccessful, the property cycle have to complete its decade cycle.

          • Zahid Ali
            Time will tell how successful NAYA PAKISTAN HOUSING PROGRAM will be.
            BUT
            NADRA Site has crashed due to the massive traffic.
            One thing is clear that people want the alternate to private housing schemes due to the scams.
            As I described many times that why people buy property in expensive plus illegal housing schemes when affordable government housing is available.
            NAYA PAKISTAN HOUSING PROGRAM looks like a game changer if we see the interest of people.
            But investors who bought properties in 2016/17 are now trapped in 5/8 years property cycle.

      • Not only investors lost money but also every pakistani lost 30% money.

        Real estate is not crashed. It is increasing wirh a slow pace.

        Reply
    • Ibrahim

      on   said 

      Agreed with Ibad…In Finance bill of 2018, director general of property to be appointed in order to determine the market price and then FBR will have the right to buy the property by 100% premium on the declared price, but as per clarification in the last month, this rule will not be effective until the appointment of director general through notification.

      Therefore, DC and FBR rates still applicable. Further the DC rates is the matter of provinces but they do not have any intentions to change it yet.

      Since then any one but the property for which the value in the market is 100 million, but actual declaring at DC rates which is the less then Rs.5 million, and non filers can but the property at this threshold.

      The black money in the real estate market can only be stoppable when federal and provincial govt. register the property at the market rates instead of DC or FBR rates, when this will happen, then it affect the real estate market

      Reply
    • rizwan

      on   said 

      ON YOUR POST I JUST CALLED MY FATHERS RELATIVE IN LHR WHO HAS AN ESTATE AGENCY… N TO MY SURPRISE HIS ESTATE AGENCY IS CLOSING DOWN… THIS IS FIRST HAND KNOWLEDGE AND NOT HERESAY AS I TALKED TO HIM MYSELF…HE SAID THERE IS ALMOST NO KAAM IN THE MARKET AND I CANT EVEN AFFORD THE RENT OF THE OFFICE…HE WAS AT HIS HOME VERY UPSET AND SAID THERE IS NO INCREASE IN PROPERTY PRICES AND HALAAT PROPERTY K BUHAT HE DULL HAIN IN LHR… NO ONE IS WILLING TO BUY PROPERTY AND MAJORITY IS AT STAND STILL … I FAIL TO UNDERSTAND WHEN THERE IS NO DEMAND IN MARKET THAN HOW CAN PRICES INCREASE?? SO PLZ PPL DO NOT COME INTO FALSE TALK OF PROPERTY AGENTS THEY R JUST LYING THAT PROPERTY WILL INCREASE…
      AND DEAR IBAD 500 YARD PLOT OFFICE RATE IN DHA LHR IS 55 TO 65 IN PH6 DHA WHICH MEANS ONLY FILER CAN PURCHASE IT….SO PLZ DONT MISGUIDE PPL …. PROPERTY IS AT A STAND STILL AND BRACE FOR IMPACT AS MAJOR PRICE CRASH IS EXPECTED

      Reply
      • Rizwan
        Last night I was with few real estate agents.
        I questioned about market situation of DHA Lahore.
        They said haven’t revived any call since the approval of MINI Budget.
        MY NEXT QUESTION WAS;
        How you see property market in JAN 2019.
        They started looking me like I have said something related to mars.
        ANSWER OF ESTATE AGENTS;
        We are worried about OCT 2018 and you are asking about 2019.
        MY QUESTION ABOUT PROPERTY PRICE FALL;
        ANSWER;
        Prices down by 25-30% since 2016. But if situation remains the same by NOVEMBER 2018 25% prices will crash.
        QUESTION?
        Within a month.
        ANSWER OF ESTATE AGENTS?
        How many properties in DHA we can buy with 5 million?
        Who will dare to register property?
        They finally said they have lost everything including hope.
        FINALLY ONE GUY SAID WE ARE THINKING IF THIS CRASH IS LIKE CRASH OF 2006-8, THEY WILL BE HAPPY. SO THEY ARE EXPECTING SOME BIG SURPRISES.

        Reply
        • M ANWAR

          on   said 

          SIR, price of 10 marla plot in dha2 isb was 8 million in year 2017, now a days its price is more than 10 million, how u r saying that prices are falling.

          Reply
        • rizwan

          on   said 

          AND BHAIYO NA TU MAIN MALIK SAHAB KA KOI RISHTAYDAAR HON NA KUCH ….I AM SAYING XACTLY WHAT MERI HUMARAY RELATIVE SAY BAAT HUI HAI…N HE IS LITERALLY AT HIS HOME WITH NO WORK…. ALTHOUGH UPTIL NOW THE PRICES HAVENT CRASHED AS MUCH AS EXPECTED BUT HE SAID K THERE IS LITERALLY NO KAAM IN THE MARKET…AND THE TIME IS NEAR WHEN PPL WILL HAVE TO BUDGE TO SALE THEIR PROPERTY AT LOWER RATES SINCE NO ONE IS WILLING TO BUY AS PPL AFRAID OF FBR AND NON FILER CONDITION….

          Reply
  13. Zahid Ali

    on   said 

    CURRENT ECONOMIC CONDITION OF GCC

    Forwarded as received

    Entire GCC Crumbles Like A Pack of Cards: 19 Banks Merge, Etihad Can’t Pay Back Debt, Saudi Contractor Can’t Pay Salaries, UAE/Saudi Halt 3 Projects of $243 Billion, $11 Billion Bail Out For Bahrain & Jordan

    We have been warning our clients and investors about the complete collapse of GCC since 2015.

    Thousands of businessmen across GCC have gone into turmoil ever since, property prices have collapsed and thousands are in jail or have run away or are involved in multiple litigation while Govt’s are not making payments leading to freezing of thousands of business.

    Trump is openly humiliating and challenging Saudi, Etihad is at the verge of a slow death like collapse and bailouts of large corporations and entire countries are in full swing.

    Last week, we elaborated how bad things were in the UAE.

    Multi Billion Dollar Companies Continue Their Collapse In UAE: 3 More Banks To Merge

    In all, at least 19 major banks have merged across GCC within the last 12 months approx.:

    8 banks have announced mergers in the UAE alone (2 completed in 2017 and 6 shall merge in 2018).

    3 merged in Qatar in Aug 2018.

    2 merged in Kuwait-Bahrain in Aug 2018.

    Now 2 oldest banks have merged in Saudi in Oct 2018.

    Saudi banking mega merger reflects Kingdom’s reform agenda

    2 were merged in Oman in Aug 2018.

    Merger of two Omani banks will form an entity with 25% share of loan market

    Yesterday, 4 Oct 2018 was a terrible day across GCC.

    2 more banks were merged in Oman.

    Two Omani banks announce agreement to merge

    Aside from banking mergers, sovereign fund closures/mergers, aluminium company mergers, the largest petrochemical companies in Saudi are also in trouble and are now being merged.

    These companies are and were the heart of Saudi and UAE economy and they are almost all insolvent.

    Saudi petrochemical firms sign $2.2bn merger deal

    Early this week, a major USD 200b solar power project with Japan was also shut down despite being launched just in early 2018.

    All these are signs of rapidly evaporating trust of foreign investors and fleeing of local assets and lack of any cash with the Saudi Govt to even save their own reputation, never mind their corporations.

    Saudi shelves $200 billion SoftBank Solar project: WSJ

    To prove that what we say is true, Govt of Saudi (until few years ago that was the richest country in the world) is taking loans. This is like blasphemy.

    Saudi sovereign wealth fund takes on rare $11 billion loan

    Never before a rich country has gone downhill so fast in just 3 years since 2015.

    USD 11b is needed by Saudi every month as their deficit. This is just 1 month worth of borrowing. The public sector salaries and Govt spending on empty shell towers and mini cities and security are enormous and completely unsustainable.

    Ejecting expats is not the solution because expats were paid the lowest while locals are paid the highest. How can Saudi Govt eject the locals?

    However, Saudi Govt did the unthinkable when they arrested the top 2,000 princes, royals and elites and took way their financial and real assets worth trillion dollars or more.

    This is a complicated subject because it is linked to Trump, petro dollar, US hegemony status, price of oil (which went above $60 after this event and broke our unbroken perfect record that oil will stay between $20-60 since Dec 2014) and is also linked to the US military over which Trump is now very upset, accepting yuan for oil and China, Russia etc.

    In June 2018, Jordan was bailed out with USD 2.5 billion.

    Yesterday, 4 Oct 2018, again Jordan was bailed out.

    Saudi Arabia, Kuwait, UAE deposit over $1 bln in Jordan Central Bank

    And by the afternoon of 4 Oct 2018, Bahrain also had to be bailed out (again!).

    Gulf allies set to sign $10bn aid deal for Bahrain

    On 4 Oct 2018 itself, Dubai announced that 2 multi billion dollar projects were halted and one major Abu Dhabi fund (despite a merger with IPIC recently) also went into a default (whose fancy word these days is “restructuring” since 2008).

    With EXPO 2020 approaching, the collapse of Schon Properties who was building several towers in that area and now the shut down of expansion of Al Maktoum airport seems things are worsening every month for the over marketed EXPO 2020 project.

    And we have not even talked about the high chance of increase of VAT from 5% to 10% by next year in the UAE and Saudi yet.

    Dubai’s $36 billion Al Maktoum airport expansion put on hold: sources

    Sobha Group launched this new project last year and promised in April 2018 that they will do ground breaking by Oct and when October arrived, they shelved the massive project as well as put their future 2021 IPO on hold due to “financial consolidation”.

    Sobha Group halted a USD 6.8b development in RAK

    Things are so bad on 4 Oct 2018 in Saudi that although the King of Saudi cancelled the plan for Aramco IPO last month (which also we had predicted that it will never happen) and now Aramco has no money to pay salaries.

    What better proof than an actual video of police shooting on hundreds of Aramco employees on 3 Oct 2018 who were protesting over unpaid salaries.

    Security Forces Clash with Striking Aramco Workers in Eastern Saudi Arabia (+Video)

    EDIT: 7 Oct 2018:

    It has just come to our attention that unpaid salaries are not by Saudi Aramco but some Saudi contracting company.

    We apologise for the error due to the news release above by the Tasnim News article.

    4 Oct 2018: Saudi police fires at angry workers protesting over unpaid salaries

    Another author wrote about Saudi as a failed state where ISIS and Al Qaeda are taking hold, also on 4 Oct 2018. This is mostly due to the economic collapse that will allow the unemployed and the disenfranchised to join the militants instead of getting to work.

    Well, we have predicted this since 2015 and it is now building up, so no surprise to us.

    Is Saudi Arabia the Middle East’s Next Failed State?

    For multiple reasons, GCC have been forcing expats to leave in millions that has created a massive problem for all sorts of businesses from banks to retailers to hotels and Govt services.

    Yesterday, 4 Oct 2018, FT opined on this matter which we have said since many years that if expats leave, it will not bring back the good ones. While locals can fill the gap but barely 10-20%. Which leaves a massive gap of 80% plus due to which service levels, business levels and investment levels will plunge to such pathetic levels that it will be beyond alarming.

    All we can do is wish good luck to all the businesses and customers operating or residing in the Gulf because they will never find good employees (due to tensions/missiles/wars in the region and lowest wages being paid over the last 5-6 years) and will also never find good employers (since employers don’t get paid by their customers or the Govt hence they cannot pay exorbitant rents and hefty business costs and decent salaries causing them to run away, go to jail or simply collapse).

    Ask anyone in the Gulf and they will all say the same thing – there is absolutely no business (except a little bit in online e-commerce or a bit of tourism). But shhhh, there are laws in the Gulf to arrest and give multi million fines for anyone who speaks of the harsh reality.

    Skills gap prompts Bahrain to shift focus to schools
    “Businesses complain of a mismatch between their needs and young workers’ abilities”

    Meanwhile, Etihad is in terrible shape.

    They shut down their business and first class lounge in the world’s most important city for travellers being London this week.

    They will close many more lounges every week in the weeks ahead.

    They have turned into a budget airline where one needs to pay for food, are closing exclusive lounges, have shut several destinations, sold 20 plus planes, shut limo services in almost all countries except UAE, reduced several meal types as well as many amenities on board.

    STRUGGLING ETIHAD AIRWAYS CLOSE FIRST & BUSINESS CLASS LOUNGE IN LONDON

    The investors in Etihad are fearing a collapse and just today, 5 Oct 2018, they have written a letter to Etihad and Dept of Finance (and most likely copied to the Ruling Family of Abu Dhabi) to help them get their billions back.

    It will wise for Abu Dhabi to bail out Etihad investors but the million dollar question is, how can they do so if they simply don’t have enough cash?

    And if they pay 1 bond, then the second bond holders will come forward who were defaulted last year. They are doomed if they pay and doomed if they don’t!

    Etihad bankrupted Air Berlin and Alitalia last year and could not pay off that bond, therefore, chances are very low that they can help Etihad bond investors who are demanding USD 1.2b in 2 bonds while the next interest payment date of 29 Dec 2018 is coming closer every day. The bond is now trading at USD 57 level today which is at severe distress levels.

    There are almost no solutions to the problems of the GCC because they are so acute and almost all are self created. They cannot print money nor borrow more and don’t have much cash to pay for all their margin calls either.

    The house of cards is crumbling down faster and faster in 2018 across GCC and proving us correct in our prediction for every year about the GCC since 2015.

    We can only warn everyone that the worst is yet to come.

    Reply
    • Zahid Ali

      Economic fall of Middle Eastern countries means low remittances so PAK Economy will hit hard.
      PLUS
      Low investment in Pakistan real estate sector so price fall.

      This fall will be much ugly than the fall of 2008.
      SAME SITUATION AS WAS IN 2008.
      The first country to go down was DUBAI and same is the situation now.
      China benefited massively and emerged as the nation with largest trade volume and purchasing power.
      MANY ECONOMISTS SAY THAT THIS CRASH WILL COLLAPSE THE DOLLAR. THE WORLD IS MOVING TOWARDS GOLD STANDARD.

      Last credit crunch and housing market 2008.
      Property prices fell worldwide.
      A terrible memory as prices crashed worldwide and what we saw in Pakistan a plot selling for 1.5 crore before crunch was for sale on just 50 lac.
      60/70% price fall.
      Things are even worst this time.
      Add the global meltdown plus ruthless accountability and new laws in Pakistan that were not in 2008. So property price crash will be massive.

      THIS IS NOT THE TIME TO SPEND IN HIGH-END REAL ESTATE
      People who want to invest money in real estate sector should buy only small properties worth 25-50 LAC. As small properties will maintain the demand. But high end luxury property will be the biggest victim.

      A REALTOR TOLD ME FEW DAYS BACK THAT WE WERE SITTING IN OUR OFFICE WITH A CLIENT WHO HAD 3 PLOTS IN DHA PHASE 5 LAHORE. CLIENT BOUGHT 2 PLOTS FOR 3.1 CRORE. AFTER CRASH NO ONE WAS WILLING TO BUY 3 PLOTS FOR EVEN HALF OF THAT.
      CLIENT BECAME SUDDENLY SILENT. MY FRIEND CALLED THE OFFICE BOY FOR WATER. SUDDENLY CLIENT COLLAPSED AND DIED OF MASSIVE HEART ATTACK BECAUSE OF DEPRESSION AS HE LOST HIS LIFE SAVINGS.

      I HAVE REPEATEDLY TOLD EVERYONE TO WAIT AS THINGS ARE NOT GETTING BETTER. WE CAN JUST HOPE THAT PAKISTAN WILL BE SAFE FROM THE COMING FINANCIAL ARMAGEDDON.

      Reply
      • Malik

        on   said 

        over speculated as usual, like Dr Shaid Masood when you watch his program one thinks that ” fouj pehly ay gi ya maot”. up and down are part of any business. its time of correction which is good for market. where as death case is concerned am sure they way you tell the current picture by clubbing things from here an there and make sure no one goes back live .

        Reply
        • Malik
          Yes market correction is a good thing.
          BUT
          This is not the market correction. PAKISTAN REAL ESTATE SECTOR IS CHANGING FOREVER.
          New laws introduced.
          1- No black money investments
          2- 5 Million Affordable Housing Scheme
          3- Property Purchase Restrictions for NON-Filers
          4- Restrictions for Overseas Pakistanis
          5- Higher Texas

          The condition of real estate sector is worst now as compared to the last property crash of 2006.8. So price fall will be more. Pakistan real estate sector will not see any rise for many years to come. The story of Pakistan reality market is not different from Dubai Property crash.

          Reply
      • M Anwar

        on   said 

        Sir, how much we have to wait, as in real, prices are going high.
        Price of plots in dha 2 & 5 isb are increasing day by day and u r saying that prices are falling

        Reply
  14. Zahid Ali

    on   said 

    IMF WARNING

    https://www.theguardian.com/business/2018/oct/03/world-economy-at-risk-of-another-financial-crash-says-imf

    The world economy is at risk of another financial meltdown, following the failure of governments and regulators to push through all the reforms needed to protect the system from reckless behaviour, the International Monetary Fund has warned.

    With global debt levels well above those at the time of the last crash in 2008, the risk remains that unregulated parts of the financial system could trigger a global panic, the Washington-based lender of last resort said.

    Reply
    • Zahid Ali
      10 years economic cycle.
      US might survive. But Europe will be be hit hardest.
      For example UK + France economies are still less after 10 years what were in 2008.
      Other vulnerable area is Middle East.
      In 2008 credit crunch Dubai economy was bailed by other Gulf states.
      But this time no one save them.
      Change of political scenario.
      Turkey the most powerful country in Europe and Middle East with the only exception of Russia. Turkey will snatch Makkah, Madina & Jerusalem to revive Ottoman Empire. Turkish armies already in Syria + Qatar.
      Europe will descend into to dark ages.
      INTEREST RATE IN EUROPE = 0%.
      Europe emerged from last crisis after reducing the interest rate.
      BUT NO MORE BULLETS so fall of Europe as we see is imminent and might be as terrible as that of Venezuela.
      FRUITS OF BORROW AND SPEND ECONOMIC MODEL.

      Reply
    • Zahid Ali

      Asad Umar’s Mini Budget & Pakistan Real Estate Sector related Amendments (For both local and overseas Pakistanis)

      EXEMPTIONS:

      #1- Overseas Pakistanis don’t need to be FILERS to buy properties in Pakistan for living purpose. But they have to be FILERS to invest in Pakistan real estate sector for business purpose.
      #2- NON-FILERS can inherit property from suppose or parents.

      RESTRICTIONS:

      #1- Overseas Pakistanis have to produce a certificate from the bank to;
      A- Prove that money was remitted through proper banking channel
      B- Prove that money was sent from abroad just 60 days prior to property registration or transfer
      #2- Local Pakistanis who are NON-FILERS can’t buy property worth PKR 4 Millions or more.

      PENALTY:

      If any registering authority of excise and taxation department accepts, processes or registers an application of NON-FILERS for the registration of an immovable property, such person shall pay a penalty of 3% of the value of the property.

      BLACK MONEY INVESTMENT IN PROPERTY SECTOR ARRESTED BY NEW LAWS

      1- NON Filers can’t purchase property worth more than 4 Million PKR.
      2- No authority will transfer property for non-filers as the person/authority will have to pay penalty equal to 3% price of property.

      These two clauses have blocked the inflow of black money into reality sector.
      Prices will fall sharply for both plots and houses as it will be the biggest challenge for sellers and property dealers to find buyers who are filers.
      THEREFORE MASSIVE PRICE CRASH AHEAD.

      IMF & INTEREST RATE

      Interest is moving towards double digit figure its just the matter of time. We are moving in the times of 2008 when interest rate moves to double digits and real estate and construction sector were hit hard.

      IMPACT OF NEW DEVELOPMENTS ON REALITY SECTOR

      The government wants to divert the money from real estate sector to industries or job creating businesses.
      So still right time to move money from reality sector.
      REAL ESTATE PRICES IN PAKISTAN ARE MOVING BACK TO THE LEVEL OF 2012. JUST THE MATTER OF 6-8 MONTHS.
      A MASSIVE PRICE CRASH IS AHEAD IN SAME STYLE AS DUBAI.

      Reply
      • Overseas

        on   said 

        In some ways 60 days condition is a kind of blocking an overseas Pakistani to buy plot or house. Large proportionsent/sending thier earning month by months and save for a certain figures. Now new rule demands all amount to be remitted within 60 days, means one has to keep all saving abroad for sending in one go.
        There are several confusion already prevailing with regards to valuation which need clarification.
        I expect many new rules and amendments are following in due course when impact of current rules will be resulting in loss of tax collection due to less transections.

        Reply
        • Overseas
          The aim of government is not to collect taxes but the looted money.
          So according to this mindset government is working in the right direction.
          WHAT I FEEL the recent amendments are like death blow to the real estate sector.
          If it was also the aim of the government to divert investment to other sectors from property sector, then government has succeeded.
          LETS SEE HOW GOVERNMENT ENDS CORRUPTION AND BLACK MONEY IN PAKISTAN.

          ONE THING IS CRYSTAL CLEAR THAT SATTA CULTURE WILL END AND SO WILL THE SPECULATION.
          NOW REAL ESTATE IS FOR REAL BUYERS INSTEAD OF PARKING ILLEGAL MONEY.

          Reply
    • RIZWAN

      BLACK DAY FOR PROPERTY DEALERS

      If property dealers file for registration on behalf of NON-FILERS, realtors have to pay 3% price of property as penalty.
      This clause is enough to destroy property market.
      End of speculation.
      End of SATTA CULTURE.

      Reply
      • Ahmad

        on   said 

        Malik sahib,
        Since laws have been changing frequently it is difficult to catch up what’s the latest one. Please advice if someone is still paying installments in private housing society like DHA or Bahria and he is non filer , will there be any issue during handover of property. When someone booked the property this law does not exist. (BTW some of the non filers are overseas pakistani and now living here) Thx

        Reply
      • M ANWAR

        on   said 

        no sir, prices will not fall, prices r increasing day by day.
        to buy a plot we have to go to market and in market, we have to deal with dealers and what they ask price, we have to negotiate with them.
        2 months earlier, plot of 5 marla price was 55 lakh, now its price is 75 lakh.
        then how u can say that prices are falling.

        plz do not delete it.

        plz reply

        Reply
    • RIZWAN

      PAKISTAN BUDGET 2018-19 AMENDMENTS (FOR REAL ESTATE SECTOR)

      (EXEMPTIONS)
      1- Overseas Pakistanis can buy property in Pakistan to build home or for living but not for business purpose. OVERSEAS DON’T NEED TO BE TAX FILERS.
      2- INHERITANCE PROPERTY can be transferred to relatives without being filers.
      (RESTRICTIONS)
      1- LOCAL PAKISTANIS who are non-filers can’t buy property worth PKR 4 MILLION OR 40 LAC or above.
      2- Dealers who will file to register for non-filers will have to pay 3% property prices as the penalty.

      CURRENT DEVELOPMENTS / MARKET SITUATION

      1- Sale / purchase has stalled.
      2- Ruthless accountability.
      3- Illegal constructions have been demolished.
      4- Government properties evacuated.
      5- FBR/NAB chasing the black money.
      6- Interest rate increase.
      7- Record low transactions.
      8- Only sellers in the market.
      9- No serious buyers.
      10- 6,000 illegal housing schemes in Pakistan under radar of FBR.
      11- Restrictions on new housing schemes.
      12- 5 MILLION AFFORDABLE HOMES BY GOVERNMENT WILL BE LAUNCHED THIS MONTH.

      IMPACT OF PAKISTANI MINI BUDGET 2018-19 ON REAL ESTATE SECTOR

      1- End of speculation and SATTA CULTURE.
      2- Due to ruthless accountability investment will move to other sectors.
      3- Massive price fall expected in next 6-8 months.
      4- Total crash of luxury property.
      5- Property under 4 MILLION will get boot first but will loose charm when 5 million affordable homes will be launched.
      6- Honest tax payers / genuine buyers on driving seat as they will buy affordable homes in the near future.

      HOW MUCH PROPERTY PRICE FALL EXPECTED IN PAKISTAN

      (TOTAL PRICE FALL)
      Pakistan is moving towards Dubai style crash where property price is just 25% of what it was in 2008. Property prices in Pakistan peaked in 2016. Since then prices have crashed by 30%. So another 30-40% price fall. So like Dubai we should be ready for more than 50% price crash.

      (BEST TIME TO BUY PROPERTY)
      1- Buy property when prices are record low.
      2- Prices will collapse even more when 5 million new homes will be launched. SO WAIT.

      Buyer’s should wait as they are on driving seat. No need to panic as everyone can see the crackdown on black money, illegal schemes and property frauds. MASSIVE PRICE FALL IN ON THE WAY.

      Reply
      • Zia Khalid

        on   said 

        Hi,

        I disagree with it.

        Plot price will decrease because of desparte seller but constructed home price will not decrease that much.

        for example plot price in DHA Karachi is 400 craor and const cost was 1 craor = 500 caror total price in 2012

        now in 2019 plot price in DHA Karachi may come to 200 craor and const cost was 2.5 craor(due to infaltion) = 450 caror total price will still be not much reduced in 2019

        Reply
        • Zia Khalid
          The real issues are 2;
          1- NON Filers can’t purchase property worth more than 4 Million PKR.
          2- No authority will transfer property for non-filers as the person/authority will have to pay penalty equal to 3% price of property.

          These two clauses have blocked the inflow of black money into reality sector.
          Prices will fall sharply for both plots and houses as it will be the biggest challenge for sellers and property dealers to find buyers who are filers.
          THEREFORE MASSIVE PRICE CRASH AHEAD.

          Reply
      • Malik

        on   said 

        there will be short term impact but think about the population the way its increasing, in 1930 pakistan is expected to be 4th largest populated country. it will need huge housing requirements too.
        Its not Dubai where 80 expatriate are living. Pakistan real estate might remain stagnant for 4-5 yrs but will increase 3 times when new cycle starts in 2022/23.

        Reply
        • Malik
          Most people will buy affordable homes by the government. 5 MILLION Homes.
          No one will buy the homes in illegal housing schemes where prices are record high.
          Another thing is that budget has been crafted to block black money investment in property sector. High-end / luxury market will be biggest victim.
          So property prices will remain stagnant for a long time period.

          Reply
    • RIZWAN
      What is crackdown on black money or property scams?
      1-Destruction of illegal constructions.
      32,000 KANAL Land or 5% land within Lahore Ring Road which is prime city is illegally occupied by mafia.
      2-According to SC there are 6,000 illegal housing schemes in PAKISTAN. Some plots are sold out to 15 different buyers.
      3-FBR is already asking the source of income
      NEW DEVELOPMENTS ABOUT NON FILERS
      PAKISTANI NON FILERS can’t buy property
      Pakistani expatriates can buy but only for building homes not for business purpose or hoarding wealth.
      3- CONSTRUCTION OF 5 MILLION HOMES.
      4- INCREASE IN INTEREST RATES
      ALL DEVELOPMENTS WILL LEAD TO DUBAI STYLE PROPERTY CRASH. WITHIN 6-8 MONTHS 50% PRICE CRASH

      Reply
  15. Zahid Ali

    on   said 

    Vancouver Housing Demand Drops Like A Rock, And Prices Are Now Falling

    https://www.huffingtonpost.ca/2018/10/02/vancouver-housing-demand_a_23548479/

    Somebody should work for big cities of Pakistan that how many plots/flats/houses selling every month for every 100 plots/flats/houses available for sale in the market. This data shall be available for each calendar month so that one can compare the current data with any previous data.

    The same is analyzed in the above article.

    This data would be very beneficial to analyze the market situation. Right now we only have demand amount of property from seller side. No other data available.

    Reply
  16. Misbah Ul Haq Syed

    on   said 

    Malik Sb,
    I just failed to understand one thing….how on earth do you get time to answer all the posts and create new ones every now and then? You seems to be only doing this job as if this is your only job!! But thanks for all your help.
    Kind regards, Misbah

    Reply
  17. Ahmad

    on   said 

    If some property price was 4 crore in 2015 and same property price in 2018 is still 4 crore. It does not mean value of that property is 4 crore or property price is not depreciated.

    Reason is in 2015 1 USD = Rs 103, now it is more than 127 Rs. Actually real value is almost 3 crore with respect to 2015 if the current value of that property is 4 crore. Difficult to explain 😀

    Reply
  18. Shamila azeem

    on   said 

    Dear sir,
    I read your article regularly.Having a long discussion on the pricing of real estate I will advise to all of the reader are as under

    1) Keep yourself calm
    2)Invest your money on USD or Gold
    3)Try to increase your income from two resources. keep in mind that inflation is 15%, it means if you keep money in bank then it will reduce the value 15% yearly.
    4) Try to make passive income
    5)Away from real estate and stock market investment
    6)Wait patiently to stable the market once of real estate and stock.
    7)Make sure that you can only buy a home if you will have to manage your investment wisely. if you are in a panic and lose money then the dream of your home will far away and it would very difficult to fulfil.

    for further information on how to a person can become financial freedom from his entire life see my: youtube video and link up on Facebook.: shamila azeem

    Reply
    • Zahid Ali

      on   said 

      Gold is good investment for the next five years, but I don’t think USD is good investment for years. It may be good for months. 1 USD is already crossing 127. Now very little margin is left. The maximum exchange rate of USD would go up to 135-140, and then it will be stabled there.

      This is my analysis and I may be completely wrong.

      Reply
  19. Zahid Ali

    on   said 

    Normally, after the peak of real estate decade cycle, the prices fall. This is general phenomenon of everywhere in the world. The question is how much the price will be decreased? In normal circumstances, the thumb rule is that the prices are settled somewhere around average of the lowest and highest prices of that particular decade cycle. Suppose in 2012, the plot price were 1 crore and the same plot peaked price (in around 2016) were 3.5 crore. Then this plot price may generally be decreased to ((1+3.5)÷2)=2.25 crore.

    http://dhatoday.com/best-time-to-invest-in-dha-karachi/

    But keep in mind that this is in the normal circumstances. Pakistan have peculiar circumstances right now.
    1) Ban on non-filer over 5 million.
    2) Rising interest rates. State bank may further increased discount rate upto 1% today.
    3) The notices to 100 big defaulters of fbr are already issued. This is beginning.
    4) Pakistanis have started selling their properties in UAE even in less prices after getting notices from FBR.
    5) Anybody who have to purchase property in pakistan, must be filer and must have the proof of source of income.
    6) Crackdown on illegal housing scheme.
    7) Supreme court decision on bahria town karachi.

    http://e.dunya.com.pk/detail.php?date=2018-09-27&edition=KCH&id=4197616_94694094

    Due to the circumstamces given above, more chances that the property price will be decreased more than the normal decade cycle.

    People are confused by looking the property price on different websites that property prices are same as it was in june 2016. The sellers are dreaming and not reducing price even they are waiting for any buyer for 2 years.

    Now my advise is that dont purchase property upto 2023 unless you really need it. If you really need even then wait for 2020.

    Try to invest your amount somewhere else and try to increase your amount as much as possible upto 2023. Dont invest in any risky business like stock market or any business for which you dont have any experience.

    Then you will be in very good position to purchase a property in 2023.

    Reply
    • Zahid Ali

      PAKISTAN INTEREST RATE INCREASED BY 100 BASIC POINTS (29 SEPTEMBER 2018)
      INTEREST RATE INCREASE MEANS PROPERTY PRICE CRASH
      So Interest rate stands at 8.5%.
      During property peak of 2003-2006 interest rate was 7%. Property crashed when interest rate increased to 9%.
      During recent property boom interest rate was 5.75%. Now Interest rate is 8.5%.
      INTEREST RATE INCREASE ALWAYS RESULTS IN DECREASING THE PROPERTY PRICES AS PEOPLE SELL PROPERTY TO DEPOSIT MONEY IN BANKS FOR PROFITS.

      HOW BADLY INTEREST RATES IMPACT PROPERTY PRICES:
      The credit crunch of 2008 happened due to housing finance / mortgage crisis. Prices fell by 40% across the globe. Immediately all banks reduced the interest rates. This result is moving the prices back to pre-crisis level. Still interest rates are low in Europe as if interest rates are increased, mortgages will be expensive. So chance of another credit meltdown.
      On other hand when interest rates are increased then price crash is a must.

      CURRENT PROPERTY MARKET SITUATION IN PAKISTAN
      No buyers but the desperate sellers. Why people buy property when they know prices are falling and they will sustain huge loses.

      WHY PROPERTY PRICES WILL KEEP FALLING IN PAKISTAN (WE ARE IN WORST SITUATION THAN THE DECADE PROPERTY CYCLE)
      1- Crackdown on illegal money.
      2- Increasing interest rate.
      3- Declining economy.
      4- Construction of 5 Million Affordable Homes. (Why people buy property in expensive illegal society when government is building affordable homes).

      ALL PAKISTANIS SHOULD GET READY FOR PROPERTY PRICE CRASH EVEN WORST THAN WHAT WE SAW DURING MUSHARRAF’s TIME.
      WHY THIS CRASH WILL BE MORE MASSIVE;
      1- During last crash black money was never controlled.
      2- During last bubble bust 5 million houses were not introduced.
      3- During last crash interest rate moved from 7% to 9% so 2% change. But this time interest rate have moved up from 5.75% to 8.5% so 2.75% change and by years end it will be 9.5%.
      4- During last crisis NAB/FBR was not active against illegal housing schemes.

      People will also observe the car lending crisis as seen during 2006-10. Due to sudden rise in interest rates many people will be unable to pay the car loans as loans increase with the increase in interest rates.

      Reply
      • What you are advocating makes absolute sense and that is the reason many people like me have been waiting for that price crash before they could buy their home at an affordable price. I also agree many deals have shut down their businesses but this change is not visible at all… sellers continue to ask for higher prices and dealers would laugh at you if you told them that market is ready for a crash. They behave like we shall be the biggest losers if we didn’t buy today. Reality is we can not go find the real owners of the property ourselves and dealers have got the stranglehold on the sale/purchase of the property. They control the market the way they want by spreading panic to sellers while showing dreams to buys. the matter of fact is that market is in the hands of corrupt people (dealers) who manage black mony of mafia and they go any extend to keep their and their masters interests safe even if they have to deceive someone with hard-earned money. My question is whos address this corrupt behavior and malpractices of dealers???

        Reply
        • Umer
          Dealers are not controlled directly but indirectly
          Reason;
          They pay huge donations to politicians worldwide
          How dealers are controlled indirectly;
          New laws are introduced that crash the market and dealers close their agencies due to low transactions.
          This is what new government has done, indirectly hitting the dealers.
          1- Crackdown on black money
          2- Increase in interest rates
          3- Construction of 5 million homes
          If there were 1000 dealers in 2016 then by early 2019 there will be just 350 dealers in the market.
          I personally feel that property will never ever again attract the investments as we saw in past.

          Reply
      • Zahid Ali

        on   said 

        Dear Mr. Fraz

        There are many ways to think about this situation.

        Suppose the plot price right now is 3.5 crore.

        Now, what would be this plot price in 2023?

        Current prevailing interest rate which NSC offering is around 9%. Means 0.75% per months.

        So If one put 3.5 crore in fixed deposit, the net worth of 3.5 crore after five years would be

        3.5x((1.0075)^60)= around 5.5 crore

        If a person hold this plot till 2023 and the price of this plot would remain same (3.5 crore) then he would actually loose around 2 crore.

        Now suppose, If a person right now have 2.25 crore in fixed deposit, the net worth of 2.25 crore after five years would be

        2.25 x((1.0075)^60)= around 3.5 crore

        So, if the same plot of 3.5 crore is available in 2023 in same price (3.5 crore) then this person would be purchasing the same plot actually in 2.25 crore.

        I have not considered the interest rate which further increase in future.

        Due to the steps taken by government, there is no chance that the value of plot will increase to 5.5 crore in next five years.

        Be remember that there are always some exception.

        So the looser will be that person who will hold this plot from 2018 to 2023 and gainer will be that person who sell this plot right now (or who don’t purchase this plot till 2023) and purchase the same plot in 2023.

        This is my analysis and I may be completely wrong.

        Reply
    • M Anwar

      on   said 

      Dear sir, this is not real picture, the real picture is that prices of plots are increasing day by day.

      I want to buy the plot, when i go to market, prices are higher than the previous.

      You will definitaley reply that this is becoz the dealers prices but when u have to buy a thing in market, i/we/you have to contact with dealers.

      Please u r requested that tel the people real situation.

      Reply
  20. Farooq Lari

    on   said 

    Salaam Malik sb.
    Trust you are keeping well. I had a detailed discussion with few Lake City dealers within the society of expected future prices and any effect/price correction due to the corruption-free drive of PTI government. They looked at me as I was a fool or is joking with them. They said why the price will fall down to 2012 level and that it will never happen. They said prices in DHA and Lake City etc. are rising gradually as per market sentiments and no force in this world can reverse it.

    Obviously being a follower of your blogs on price correction/rash, I was shocked at their absolute belief of no changes in prices whatsoever. If that’s the case then this dealer mafia will never let the price to drop and middle class income group will remain deprived of buying property.

    Reply
    • Farooq Lari
      Government will start accepting application by next month for 5 million affordable homes. It will totally trashed the real estate market. FBR/NAB is sending letters to people who have invested in property to prove the source of income.
      PRICES ARE FALLING AND WILL MASSIVELY CRASH DUE TO 2 MAJOR REASONS
      1- 5 MILLION NEW AFFORDABLE HOMES; as no one will buy expensive property in illegal housing schemes. NAB has already said that there are 1000s of illegal housing schemes in Pakistan.
      2-CRACKDOWN ON BLACK MONEY; NAB has already collected 280 billion rupees. Investors are afraid to invest in real estate market.
      LOOK AT DUBAI PROPERTY MARKET which has crashed due to crackdown on black money.
      CURRENT MARKET SITUATION.
      Only sellers no buyers.
      Affordability crisis.
      People with white money has low affordability so can’t buy expensive properties.

      Reply
  21. Zahid Ali

    on   said 

    https://www.youtube.com/watch?v=1oebFqt_UME

    Today, AsadUmer categoricallly said in interview with nadeem malik that in the last previous years all investors/industrialists were using their resources in real estate for speculation. Now this government will divert their (investors/industrialists) resources from real estate to industries in order to increase export and creating jobs.

    See above link from 19:00 minutes 20:00 minutes.

    Reply
    • Zahid Ali
      One way or other real estate prices are going back to 2012 when property prices started increasing abnormally.
      Next real estate boom will be by 2023 when economy will be strong and unemployment will be low.
      WHY PROPERTY PRICES WERE HIGH?
      NO INDUSTRY WAS DEVELOPED
      INDUSTRIES WERE DESTROYED BY LOAD SHEDDING
      REAL ESTATE SECTOR WAS USED FOR WHITENING BLACK MONEY.
      AS TRENDS ARE CHANGING
      SO PRICES WILL FALL TO 2012 LEVEL.

      Reply
    • Hussain Ali Raza

      on   said 

      Lol bad news for people celebrating Mathaii on removal of non filers restriction.
      One way or other property is down till 2023.
      Ideal time to sell property now to buy later.
      I have told in last post people are afraid of FBR to invest in real estate. Foolish dealers think that property market will improve in PTI government.
      IK is worst man for property market.
      Wait till 5 million homes started by government.
      It will totally destroy real estate market.
      MY FRIENDS ARE DRIVING CAREEM AS NO DEAL IN MANY MONTHS.
      ONE FRIEND WHO LEFT TO MEET ME AFTER BUYING PRADO IS NOW LIVING ON RENT.

      Reply
        • Hussain Ali Raza

          on   said 

          Bhai Jaan
          By 2023 prices will be record low.
          Economy will be strong.
          Demand will be high.
          Purchasing power will be good due to food jobs.

          Reply
          • If the economy is strong then prices will be high. This is the universal phenomena.

            Similarly, if the demand is high, the price will increase.

            Purchasing power good means high rates of houses.

      • Overseas Pakistanis used to buy the Properties in Pakistan rather than depositing the money (savings) in foreign country, as they feel the money was save for their future when they return to their own country Pakistan and also at the same time growing in value. with last year changes by Nawaz sharif , it became difficult for the Overseas investors, So they started investing in their foreign country itself.thus reducing the FDI in pakistan. So I feel this is a good policy to let overseas Pakistani to buy property without filling the returns.

        I live abroad and it was a puzzle for me to buy a property in Pakistan. I think, it is a good step for overseas. As far as ‘trap’ mentioned, i don’t mind receiving a letter from FBR to explain my source of income. We should do honest business and there should be no fear of ‘trap’. The legal tax we pay for our country is good for all of us. We anyway pay hefty taxes while living abroad and never complain 🙂

        Reply
        • Zahid Ali

          on   said 

          https://tribune.com.pk/story/1800021/2-remittances-rise-4-24-amount-2-03b/

          It is not verified that remittances to pakistan are decreased after the ban of purchasing property for non-filer. Rather it is increased in the month of August 2018 as per above link.

          In the discussion, it looks like that majority of pakistanis are remitting amount every month to invest in real estate. However this is not true. Majority of pakistanis (more than 80%) are labour class and their remittances are only enough for the bread and butter of their families.No doubt 10 to 20 percent overseas pakistanis are well-off and they can purchase more than one property. But at the same time if we consider, only 5% inland pakistanis are well-off, then in numbers, the inland well-off pakistanis are much much more than overseas well-off pakistanis. So land mafia main target is inland well-off pakistanis which are more in numbers, for speculation in real estate, however in order to lift ban for purchasing properties, the land mafia use the name of overseas in order to get the sympathies of inland and overseas pakistanis.

          The overall remittances to Pakistan is around 20 billion dollars. But it is very difficult to estimate, how much are the actual remittances and how much the deceived remittances, which are actually smuggled from pakistan in the form of hard cash (foreign currency, like Ayan Ali) and then deposited back in pakistanis account from overseas as remittance.

          To become a filer for overseas pakistanis are even more simple than inland pakistanis. They become filer by filing online through fbr iris portal provided they have one pakistani sim in their name.

          I think, now this government will also give a provision to purchase properties and automobiles for non-filer overseas pakistanis

          So, as overseas pakistanis, we should not allow land mafia and automobile mafia to use our name for their own benefit.

          Reply
    • Sadia Ali sher

      on   said 

      What is this.
      zameen.com and lahorerealestate.com were celebrating the removal of non filer restriction.
      Both websites never tell true property condition.
      So property prices will fall in future.
      I hate UMAR CHEEMA as journalist. But this time he proves his woth.

      Reply
    • Ali asghar

      on   said 

      zameen.com Wale tu kehte hain ke property asmaan ko gaye ge. Becharee Khawaboon main rehte hain. Jabke property ke qeemat geer rahe ha.

      Reply
  22. Amreena Ali

    on   said 

    Sir
    I have read on twitter that TV anchor Kashif abbasi recieved a letter from FBR to explain income source for home he purchased.
    So FBR is active.
    This is why property price in falling in Pakistan.

    Reply
    • Amreena Ali
      Its true.
      Now everyone has to answer about SOURCE OF INCOME.
      You can’t escape the clutches of FBR/NAB.
      All amnesty schemes and removal of buying restrictions are the trap.
      FBR actions against black money has crashed property prices in Pakistan.
      Many people think another property boom on the corner. They are in denial. Property prices will collapse as black money has been blocked. No one can dare to buy property with black money as will be behind the bars.

      Reply
    • Hi Amreena
      Property prices are falling only on this page. The ground reality is that prices are increasing. Although the price increase ratio is slow as compared to previous years.

      Reply
  23. Hussain Ali Raza

    on   said 

    Imran Khan is disliked by property dealers.
    He is busy in removing all black money from market.
    This will destroy our industry.
    We dealer wish IK is removed from power otherwise we dealera will be on road.
    Property price will only increase after 2023.
    Sell to avoid loss and buy when price is low.
    Property prices are falling as Imran Khan is after black money.
    Many Allah save the dealers from IK.

    Reply
    • It is not recommended to sell your properties in a lower price. You will never be able to purchase the same property back on the same price.

      Reply
  24. Overseas

    on   said 

    Good Day

    Generally large proportion of Orerseas Pakistani are reluctant to keep all their saving in Pakistan due to ill planned policies of our politicians. Inspite our country is in need of foreign exchange , policies still preventing Non resident Pakistani (NRP) to keep all their saving in home country.

    Reasons include :

    * Previous experience of freezing of FC accounts when NRPs suffered heavy losses. NS asked the NRP to send FC . NRPs sent to “Qarz otaro etc” Pak Rs were returned to NRP at a low rate.
    People purchased FC at higher rate to take their saving in FC back abroad.

    *Now one who sends and keeps max of his saving in FC in home country is not able to take it back freely, in the event if need arises abroad.

    * Thier is no NRP accounts facility similar to indian NRI account.

    * A NRP has to pay withholding tax on cash withdrawing of money from banks. simply loosing his amount as he is not filing. No relaxation is given in this regards.

    * Question will be asked if a NRP sends his lifetime saving worth more than one million in USD. ” simply Ghorey or ghudgey ko ek hi lakri sey hanka ja raha hey” why one will send and keep his lifetime hardearned saving on the call of country needs of FC where on the other hand Govt deptt is ready to ask questions. Do one NRP has enough time to come only to explain the questions . Is it not better not to send ?.
    However every NRP loves his mother land and wish to see his country to flourish, but at the same time expects that he will not be put in unwanted formalities of expaination. Mechanism must be capable to recognize the difference between white and black collars enabling a patriotic to fullfil his responsibilty.

    * surprizingly NRP too can not deposit any cash FC in his own account. No matter the same cash was drawn from his own remitted FC.

    There are others several reasons which may prevent a NRP to avoid sending all his saving to home country in the time of need.

    Its a failure of confidance building among NRPs, to support the country needs in term of sending all their savings and keep it in the home country without any intrest making the country as a base, only with a view that they can use their own sumd eitherway without any complications from Pakistan.

    Regards

    Reply
    • Zahid Ali

      on   said 

      Overseas pakistanis already sending more than 20 billion dollars every year and it can be increased with little more but not too much. Overseas are not sending their remittance in country’s love, rather as per their own circumstances.No doubt that there is benefit for pakistan as far as remittances are concerned.

      Frozen of FC accouns is very old story no relation with current circumstances.At that time both overseas and inland pakistanis who had dollar account suffered, not only overseas.

      Indian nri account are in indian rupees not in fc. In india, there is no provision of fc account.

      Tax filing for overseas pakistanis is more easier than inland pakistanis. I am overseas and filer since 2012. So if overseas pakistanis are not filing than they have to bear the consequencies (pay withholding tax), just like inland pakistanis who are not filing.

      If overseas pakistanis want to send their hard earned money to pakistan, then they can also prove in front of FBR,FIA. Be remember that if you have white money then it is not very difficult to prove and even no need to go personally to FBR or FIA. Moreover, many agent are working depositing remittances in your pakistani aacount by taking amount in pakistan charging 1 to 2 percent. Means you pay 1 crore black money in pakistan to them and the will remitt 98 lac in your pak rupee or fc account. As per policy, this amount is now become white. So every remittance is not white money. Therefore it is absolutely necessary to prove the source of income for each huge remittances.

      FC account should not be allowed in Pakistan like india, where one can hoard FC.

      Every inland or overseas pakistani shall purchase only one house so that speculation in real estate is abolished and every pakistani is able to puchase their own house. Overseas are investing in real estate not in country’s love but to earn more and more profit.

      When overseas and inland pakisranis both love equally Pakistan then why overseas are treated especually. Overseas remittances are already tex exempted.

      Reply
      • Overseas

        on   said 

        Zahid bhai , thanks for informative input.

        Point is Why the all NRP not sending all their saving in FC, without any intrest, to support the home country’s need making it as a base to operate from there for all puposes. Bcos the operation of accounts is not free. If this happens than their will be no need for loans. Indians keep all their saving in home country in NRI accounts.
        Whereas large proportion of NRP send remittance for their needs only. Why not all saving is being kept in home country.

        Its my personal obervation which leads towards above questions.

        Regards

        Reply
  25. Hussain Ali Raza

    on   said 

    I am an estate agent with experience of 20 years in real estate sector.
    With offices in Karachi, Lahore, Islamabad and Multan.
    I have never seen such a bad property market as it is now.
    Many people think market is dead as per 5 million restriction and as NAYA PAKISTAN has removed restriction for the non filers so property boon is just on the corner.
    THEY ARE LIVING IN FOOLS PARADISE.
    Big issue is black money.
    Market is slow as FBR is sending letters to ask about source of income.
    My 6 clients are in jail because they buy property with black money. 10 crore or above in Karachi.
    NAB and FBR recommended ASAD UMAR to remove buying restriction for non filers. This is the biggest trap. All black money clients will be in jail.
    Clean up operation has started. FBR guys came to my office to acquire many things related to property deals.
    GHAR47 is totally wrong this time. GHAR47 has predicted 30% price fall. As per my experience it will be 60% crash in same time next year.
    I lost many deals because of white money and pressure of FBR.
    NAYA PAKISTAN is very bad for us
    We property dealers dislike Imran Khan as he will end all investment in property market. ABAD people know that and therefore they have jumped to build 5 million homes.
    Write down my words. Property market will be low in Imran Khan government.
    Old investors are selling property in tome to save the loss.

    Reply
    • Zarina Abbas

      on   said 

      At least you have informed us about market situation.
      Otherwise dealers always tell market is booming whereas its falling.
      When when will market normalize?

      Reply
      • Hussain Ali Raza

        on   said 

        Market will only be good after 2020.
        Best way is to sell property at loss now and buy again when prices are low.
        This way many seasoned investors have made killings.
        People who lose money in real estate are those who have love affair with their plots. Sell now to get profits in the future.
        Imran Khan is bad man for property market as he will remove all black money from real estate sector.
        Property also works in cycles.
        Last boom started in 2012 so next boom will be by 2022.
        10 years property cycle.

        Reply
  26. Zarina Abbas

    on   said 

    Who the hell you are to teach others about investments. I visited DHA Office Lahore last Thursday and there were only 8 file transfers. If you don’t have the courage to accept that prices are falling then get lost. You can’t fool people.

    Reply
    • It’s not your forum, behave yourself plz. Why u said that 2 legs donkey are saying that prices are increasing. Every one has his /her own opinion. respect earns respect

      Reply
    • Overseas

      on   said 

      What if prices in some prticular areas may be on rise depending on location , size , development etc. etc
      People of that areas may say as such.

      Reply
  27. Zarina Abbas

    on   said 

    Sir,
    I bought Kanal plot in DHA Phase 8 Lahore 1.5 years before for 2.25 crore. now want to sell but got offers 180-190 lacs.
    Who are the two leg donkeys saying property prices are increasing.

    Reply
    • Who asked u to buy non possession plot of 2.25 crore for investment purpose. Only donkey can do this. Educate ur self before buying anything. Now wait for some time, property investment is not over night game. One should invest min for 3_4 yrs for some gains. Location and timing is important

      Reply
  28. Overseas

    on   said 

    Dear Sirs

    What is black money. I understand black money is that which is not filed. Its does not mean its haram money. It can be hard earnd and saved money but not filed. Source of income however can be proved. The best example is overseas pakistani who do not file yet their earning is pure. Others examples inclde where a clear source is available, ie one non-filer who sell his old home add some saving and buy a new one.

    They can buy the properties as they can provide the source of income.

    Reply
  29. Ibrahim

    on   said 

    The government has again allowed freedom to non filers in purchasing property and automobiles which is against the spirit of increasing the tax base. Moreover, no new concrete measure has been taken to increasing tax base. I request all of you to spread this message in order to withdraw this step from mini budget

    Reply
    • Overseas

      on   said 

      Relayed msg.

      Overseas Pakistanis used to buy the Properties in Pakistan rather than depositing the money (savings) in foreign country, as they feel the money was save for their future when they return to their own country Pakistan and also at the same time growing in value. with the law that only filer can buy property, it became difficult for the Overseas investors, So they started investing in their foreign country itself.thus reducing the FDI in pakistan. So I feel this is a good policy to let overseas Pakistani to buy property without filling the returns

      Reply
      • Overseas Pakistani were not required to be filer for buying property in Pakistan. It was only for residents so question here whether one should really file tax returns now or not? Because I believe non-filers have won this game and they can park their money (balck or white) in real estate without having to file their tax returns.

        Reply
        • Overseas

          on   said 

          Every Pakistani was required to file irespective resident or overseas. Previous law restricted everyone. Its was not possible for non-resident to file.

          Reply
          • Overseas

            on   said 

            It will become a trap for resident non-filer at later stage for those who can not answer the question of source of icome. That is.my personal view. Experts may conclude.

          • Overseas
            Its just a trap to arrest the people who will buy property with black money.
            Record low transactions because of the fear.
            QUESTION IS? HOW MANY PEOPLE AVAILED THE LAST PROPERTY AMNESTY SCHEME? NOT EVEN 1 %? WHY? ALL KNOW THAT THEY WILL BE IN THE JAIL.
            The new government has zero tolerance for corruption and black money.
            MOST PEOPLE FAILED TO UNDERSTAND THAT WHY 5 MILLION BUYING RESTRICTION REMOVED
            5 Million clause removed as from now onward every one will be asked about the source of income.
            Even you buy a property of 10 LAC.
            End of property speculation.
            Property prices will only fall.
            We will see real estate price rise after half a decade when PAK Economy will pick.

          • Dear Overseas
            Govt need money urgently to pay the loan installments and to run the govt. Now there are two options either to go IMF or to adjust locally. I think they have decided to allow the old system for the time being till they establish a better system. Real estate is number one industry which can give quick returns. so that’s wy its allowed to generate quick revenue and most probably they will put the filler condition and source of money back in next budget.
            we always discuss black money of investors but we never discuss what these dealers are doing. They themselves are mafia and don’t work only on commission. They have become investors and get plot on lower prices from innocent sellers and re sell that with 5-10 prcnt margin. they also get commission from both sell and buyers too. They collect the files on rebate and then pull public opinion through whts groups and share the extra money among them. This is the real problem and govt, NAB or supreme court must take notice of these things. In Pakistan every second person is dealer or blogger with out any license or approved qualifications. They are misguiding the public every where. They are black mafia like todays media but they doubt others. we overseas are running this industry with our hard earned money and they are looting us with coordination of developers and property owners.
            see this blogger he is advertising lot of properties on his page but on other hand beating the drum that .. property will crash soon…it will hit bottom like Dubai etc etc then he should have moral courage to tell people that do not buy these properties which he has advertised because every thing will come down after few months… so all are working as per their interest and profit share. her cheez ma haram khori ha ab.

  30. SHAZEENA FAISAL

    on   said 

    Sir,
    What has happened to PAK ARAB Housing Scheme Lahore?
    Please tell us the investors.
    Early reply please I am in panic.

    Reply
    • SHAZEENA FAISAL
      Sad news for investors of Pak Arab.
      PAK ARAB Housing Society Lahore offices have been sealed by NAB.
      I have repeatedly told the readers of this blog that NAB is investigating 1000’s of illegal housing schemes in Pakistan. According to NAB there are alone 200 illegal housing schemes in LAHORE.

      DON’T PANIC
      You don’t need to panic as NAB is helping out the genuine buyers and investors. Soon Pakistan will be free from property scams as you can see crackdown on illegal constructions also.
      ALL INVESTORS OF PARK ARAB should call NAB to tell them about their investments and send the required documents or applications of complaint with your documents like payments receipts etc.

      A STRONG MESSAGE FOR EVERYONE
      1- No tolerance for the developers who have no NOC’s or have no planning permission. Or those who have sold out more files than the properties.
      2- A message for the people with illegal money that you will be chased till the hell if you dare to invest in real estate sector.

      AFTERSHOCKS
      1- Property investment volume will decrease which will reduce the property price as people are afraid to invest now.
      2- People are desperately waiting for the construction of 5 Million affordable homes as no one wants to buy expensive properties in illegal housing schemes
      3- Real estate property prices will fall as government/NAB/SC has zero tolerance for illegal money.

      ITS JUST THE START. END OF SATTA CULTURE. END OF PROPERTY SPECULATION.
      START OF THE END OF PROPERTY SCAMS.

      THE BIGGEST TARGET OF NEW GOVERNMENT IS TO RECOVER MONEY FROM PEOPLE WHO HAVE BOUGHT PROPERTIES WITH ILLEGAL MONEY.
      EVERYONE IS UNDER THE RADAR OF NAB.

      Reply
      • Malik Anwar Ul Islam sb,

        Since we know market conditions are tough and volatile then in that scenario why files prices are not coming down as we seen in past also the most affected type of properties is always files (as they are piece of paper only ). However very strangely DHA Multan, Dha Gujranwala file prices are standing very solid and showing no sign of dip. As I remember many years back prism phase 9 file of kanal hit to lowest level of 14 lac from 50 / 60 lac. However the same scenario is not seen in files business from last 3 years. Can you please explain the myth around this matter.

        Secondly in one of your post you mentioned that your friend (builder) is unable to find buyer from last 1 year and you suggested him to reduce the value otherwise it will not be sell. Can you please send me the contact details of your friends as I may looking for house and may contact him for purchase.

        Reply
        • Rajab
          Two reasons
          1- Files prices are looking good as high end property market has collapsed
          2- Its the only option for the genuine buyers in the market.3
          3- Illegal housing schemes are sealed regularly.
          Black money is leaving the property.
          So market is shifting to the new purchasing power.
          If you see Lake City Lahore; small properties have stable price but 12 Marla villa prices reduced by 10% as hard to find buyers.
          So don’t bet on boom as its just illusions.
          Why people buy expensive homes in illegal societies when government will build 5 million affordable homes for just 20-22 LAC.
          Average income in UK = 26 LAC
          Average income in Pakistan = 1.8 LAC
          Ratio = 1:15
          Average House Price in UK = 3 CRORE
          Average price in Pakistan should be = 20 LAC
          What you can get with 20 LAC?
          So highly over priced property market.

          Reply
          • Malik bhai,

            I agree with your comments, however i believe my Question is still need answer and elaboration why files prices are not coming down, if black money is going out and if crackdown happening on illegal schemes and possession plots are seeing price drop then why piece of paper is able to stand ? why price of paper is not coming down?

          • Rajab
            File price issue is due to high speculation.
            Bahria Town is dead.
            Dealers / investors have diverted their investments to DHA.
            So in few weeks you will see the bubble burst.
            There is no real demand.

        • Sadia Ali sher

          on   said 

          Non filer restriction will be back.
          So once again price will down.
          Dealer tell me after 3 months price in DHA Phase 9 of Lahore to fall.

          Reply
  31. Misbah Ul Haq Syed

    on   said 

    Dear Malik Sb,

    What is your prediction of property prices in general especially DHA City Karachi after the mini budget w.r.t. lifting of the ban on the purchase of property by non-filers and also removal of the threshold of PKR 5 million?

    Thanks for your continued feedback.

    Kind regards,
    Misbah

    Reply
    • Misbah UL Haq Syed
      I would like to give a general answer.
      Many genuine home buyers are in panic due to mini budget 2018-19 presented by the government for 8/9 months. They are worried as government has removed the PKR 5 Million restriction for non filers. In other words now non filers can buy any property they want.

      LETS UNDERSTAND WHAT CAUSES CRASH OF PROPERTY PRICES
      CASE #1 PAKISTAN
      House prices are falling in Pakistan since 2016. Many people thing that this price crash was due to the increase in property taxes introduced by ISHAQ DAR in Budget 2016. But there was no ban on non filers to buy property then why prices crashed.
      Property prices never crash due to high taxes as property prices are still high in Western countries where taxes are huge.
      ISHAQ DAR introduced a clause in Budget 2016 to aquire about the SOURCE OF INCOME. This reduced the black money flow into reality sector and property prices started falling.

      CASE #1 DUBAI
      Property prices in DUBAI are now AED 600 whereas they were AED 2600 in 2008. Property taxes haven’t increased in Dubai then why property prices are down?
      Property prices in DUBAI are down as it has singed agreements with AMNESTY INTERNATIONAL to share the information of people who have invested money in Dubai real estate.
      Dubai is hailed as the safe heaven for parking black money. As due to new international laws people can’t hide black money in DUBAI so property prices have crashed there.

      SO WHAT CAUSES PROPERTY PRICE CRASH
      The slow down of investment in reality sector crashes prices. When there are strict laws to block money investment in reality sector then property price fall.

      WHY PROPERTY PRICE WILL CRASH IN PAKISTAN
      #1 OVERHEATED MARKET
      Average house price to income ratio in UK is 1:7. If average salary in Pakistan is PKR 3.5 LAC PER YEAR. Then average property prices in Pakistan should be like 25 LAC. What can we buy with 25 LAC? So Pakistan housing market is overheated due to black money investment.

      #2 CRACK DOWN ON BLACK MONEY
      The government has zero tolerance for black money. New agreements have been made with other countries to bring back Pakistani money. So no one can dare to invest in real estate sector as even politicians have to answer about the source of income.

      #3 FIVE MILLION AFFORDABLE HOMES
      The government will soon start the construction of 5 million affordable homes. Even today government has approved the construction of 10,000 houses for poor people. Why people buy property in illegal housing schemes when affordable homes are available.

      #4 INCREASE IN INTEREST RATES
      Interest rates are increasing in Pakistan. Rise in interest rate is fall in property prices as people deposit money in banks to earn profit instead of investing in reality sector.

      #5 FALLING ECONOMY
      Due to rupee depreciation investor have already lost 15-20% value of their money. No one invests in a country where economy is falling.

      Reply
      • The non-filer restriction for buying property did seem like a pretty nifty trick to keep dirty money out. But now that I think about it, I believe we are beyond it now. In other words, at this stage of our collective national evolution it does not make much difference whether the non-filer condition is there or not. Again, this is likely more true for high value properties.

        The nation has seen tremendous positive change over last 2-3 years. Things earlier deemed impossible have happened. Negative forces are not completely vanquished, but they are in retreat; maybe not in a straight line immediate retreat that people are eager for, but definitely in retreat.

        So that’s good.

        In a nutshell, removing non-filer restriction does not mean that investors with black money will bend over backwards to buy properties worth Rs.10, 20, or 30 crores. I don’t think so. Such properties would continue to languish on seller’s shelves well into 2020 & beyond.

        The black money detection radar has been switched on after decades, and is increasingly becoming stronger. No corrupt person worth his salt would dare paint a bulls eye on his forehead by buying houses in e.g. DHA to park his beloved black money. Those days are over. You can even offer him a complimentary Ferrari on purchase of a DHA plot or house with black money, and he would still think 200 times before being foolhardy enough to display his ill-gotten hoard before the ‘radars’.

        Not so earlier. Earlier, the corrupt blatantly went on a buying spree with a conspicuous display of black money in as many imaginative ways as possible. They thought nothing in this world could touch them. And apparently the other world did not seem to matter to them. For a long time, they were right too in that they were above the law here because the law itself was polluted.

        That was a different world then.

        This is the new reality. And the net is tightening all the time.

        The way we are changing for the better, non-filer or similar conditions would not be needed. Something much stronger is hitting negative forces and surprisingly all their wealth doesn’t seem to be able to save them.

        Reply
        • Hasan
          Thanks for your insight.
          Pakistan is moving in the right direction. Just the track is bumpy.
          I have repeatedly said that 5 Million restriction is not important as most important thing is the crackdown on black money.
          WHY?
          LOOK WHAT HAS HAPPENED IN DUBAI
          Property prices are down in DUBAI due to crackdown on black money according to new international law. DUBAI WAS SAFE HEAVEN FOR BLACK MONEY.
          PAKISTANI CASE IS VERY SIMILAR TO DUBAI CASE.
          IF PROPERTY PRICES CAN CRASH BY 75% IN DUBAI THEN WHY NOT IN PAKISTAN.
          Property prices will adjust to new norms. The purchasing power of the people with white money as black money is out.
          The market situation is very different now.
          1- Hard to find buyer for expensive or luxury real estate.
          2- Good demand for small or cheap properties.
          A CLEAR INDICATION THAT BLACK MONEY IS LEAVING THE REAL ESTATE SECTOR.
          PROPERTY PRICES WILL FALL TO PRE 2013 LEVEL.

          Reply
    • Ibrahim

      on   said 

      I don’t understand why PTI allowed non filer to buy property and vehicles in pakistan. This will discourage those who file their returns and have white money….PTI should withdraw this since the prime objective is to broaden the tax base instead of increasing taxes. Further, I demand that non filer should not be allowed to have bank accounts even.

      Reply
  32. rizwan

    on   said 

    MALIK ANWAR UL ISLAM SAHAB PTI GOVT NAY TU FILER K ANDER HE KEEL THOK DIYA HAI….NON FILERS K MAZAY LAG GAYE HAIN WAKAYEE IS MULK MAIN KUCH NAI HOSAKTA HAI YAHAN SAB GOVTS MAFIA K PRESSURE K UNDER HE CHALTI HAIN …YAHAN KUCH CHANGE NAI ASAKATA HAI SAD TO SEE THE MINI BUDGET…

    Reply
    • RIZWAN

      PAKISTAN BUDGET 2018-19 AMENDMENTS / MINI BUDGET 2018-19

      Withholding tax on bank transactions for non filer increased to 0.6%.
      INCOME TAXES ON ANNUAL INCOME
      Up to Rs 400,000 – Exempt
      Rs800,000-Rs12,00,000 – Rs2,000
      Rs12,00,000-Rs24,00,000 – 5 per cent fixed tax
      Rs24,00,000-Rs30,00,000 – Rs60,000 fixed tax
      Maximum tax for salaried class – 25 per cent
      Maximum tax for non-salaried class – 29 per cent

      PROPERTY RELATED AMENDMENTS IN MINI BUDGET 2018-19
      Overseas Pakistanis don’t need to file returns.
      Non filers can invest in real estate. So 5 million ban removed.

      IMPACT OF BUDGET 2018-19 ON PAKISTAN PROPERTY SECTOR
      NO NEED TO PANIC
      REASON #1
      Real issue with real estate sector is the blockage of black money. Pakistan property prices are falling since 2016. Ishaq Dar introduced the law to check the source of income. Since then property prices are constantly falling. New government has zero tolerance for black money.
      REASON #2
      Construction of 10,000 homes for poor people laborers. 5 Million affordable homes are enough to end property mafia in Pakistan. People will never buy expensive homes in illegal housing schemes when affordable homes are available.
      ITS JUST LITTLE MORE WAIT. THINGS ARE DEFINITELY MOVING IN RIGHT DIRECTION.

      Reply
      • rizwan

        on   said 

        malik bhai black money will again start moving in after removal of 50 lac condition…. i think again genuine buyer will start losing and property mafia has come on top

        Reply
        • Rizwan
          Government is desperate to collect money as it is not willing to go to IMF. Black money is like free money for government. Government is signing agreements with other nations to bring back Pakistani money. So crackdown will remain and it will be hard for anyone to invest in real estate sector with black money.
          80% black money is parked in reality sector.
          So no chance that now black money can enter property sector.
          All will be in jail.

          Reply
        • Agree. Removal of 5 million ban is a setback from PTI govt. It was a good measure which made sense for geniun buyers and they were happy they will be able to afford their home soon however this lift of ban is seen as an extremely weak decision

          Reply
  33. salman

    on   said 

    I agree with your article but if you notice prices of small houses in karachi in developed areas which is kept on rising instead of slow demand as these houses are considered as liquid items and kept on rising. 120 Sq yards house worth Rs 2 crore in gulshan 13/d which was Rs 1.75 crore just 6 months ago.

    Slump is only observed in remote locations bahria/scheme 45 and luxury property DHA while city center property like Gulshan/ Johar/ bahadurabad still kept on rising trend.

    Reply
    • Salman
      Yes small properties are performing best but large property prices have crashed.
      Wait and see. Thing are changing.Prices of small properties will also start falling when 5 million houses construction will start.

      Reply
    • Nazir Ahmed
      This law is to control black money and encourage the people to be filer.
      This 5 million property buying restriction has already reduced the investment in real estate sector.
      Low investment is low sale so low prices.
      Lets see how MINI BUDGET will impact the real estate sector.

      Reply
        • Malik
          So this will double the property prices?
          What about black money?
          The real issue is black money crackdown and government has zero tolerance.
          Nawaz Sharif is in Jail and many will follow him soon in Adyala.
          The dream of property rise will be just dream for many years to come.

          Reply
  34. muhamamd azeem uddin

    on   said 

    Dear Malik anwar sahab,

    It is very healthy sign for the local market and pakistanis as you are saying that 5 marla house should be 20 – 22 lakh. can you share with us on which basis are you giving this news.

    kindly also share when this scheme will be introduce and mainly targeted which of the city.

    Reply
  35. Nazir Ahmed

    on   said 

    Dear malik sb,

    Hope you are in good health.

    First of all thank you for property updates. i want to just confirm that i am living in karachi and want to purchase flat for living purpose and almost waiting since 2015. As you well aware the situation of property, can you just confirm that when will be the best time to purchase property.

    Your best opinion is required.

    Regards,
    Nazir

    Reply
    • Nazir Ahmed
      Ideally the best time to purchase property is when prices are low. In case of falling real estate market, let the prices bottom out.
      A hard crash is written on the wall. Its just the matter of times.
      Hopefully by end of this year of start of 2019, prices will bottom out. It will be time to buy property.

      Reply
      • Nazir Ahmed

        on   said 

        Malik Sb,

        How we can calculate the prices are now falling down. As general, when we buy flat/home we will check the few area and the surrounding brokers are same and they constant focus on same point that the prices are increasing day by day, it is better time to purchase home. My request is very simple how we judge that the prices are now stable.

        Reply
        • Nazir Ahmed
          Meet a realtor and tell him that you want to buy a home.
          Send a person to same realtor for selling same size home.
          If there is difference in prices then there is trouble in the market.
          DECLINING ECONOMY MEANS FALLING HOUSE PRICE. Because of the loss of jobs and decreasing purchasing power.
          For example. No water in Karachi but prices are as high as properties in Dubai or UK. So sign of artificial market.
          INTEREST RATE RISE = PROPERTY PRICE FALL
          When interest rate increases people sell properties to deposit money in banks to earn profits. Flight of capital from reality sector decreases the demand due to which house price decreases.

          THE GAME CHANGER FACTOR FOR PAKISTAN REAL ESTATE SECTOR
          5 MILLION HOMES IN PAKISTAN ARE JUST WEEKS AWAY:
          According to NAB there are 1000 illegal housing schemes in Pakistan. Why people buy expensive property in illegal housing schemes when government will offer single storey 2 bedroom 5 MARLA / 120 SQ YARDS house for just 20-22 LAC and even on installments.
          Property price crash is written on the wall.
          Mafia is all but trapped.
          Its just the matter of time.
          Single blow and game is over.

          Reply
  36. Alizaa Rehmaan

    on   said 

    Dear sir,
    I read your article posts regularly.
    I live in DHA Karachi.
    My family wants to buy a house in DHA of size 250 sq yards. Now price is in range 500 lac to 600 lac
    My khaloo is also an estate agent. He told us that it is not good time to buy property as prices are falling on daily basis.
    He has told us that there are thousands property in the market but no buyers. Only buyers call to get market information. My uncle is just surviving on rents.
    He has told us that market will stabilize next year. We want our own home but khaloo is forcing us to wait. He says that we will lose big money in hurry.
    We have also listen on tv that property market is very down now.
    Please tell me when to buy as we are excited to shift in our own home.
    Thank you.

    Reply
  37. I was of the same opinion but property is regaining its value specially 5 marla and less area plots as investment is shifted to small properties due to filer restriction on big properties. I witnessed 50 to 60 transfers in dha lahore office these days. Societies around ferozpur road steadily gaining value. Even in dha lahore prices are going high which were stagnent from 2016. Now i cannot find a 5 marla old house in dha lahore under 1.5 crore. I do not know about 10 marla plus properties. But small properties are gaining value. I was waiting for a less price 5 marla plot in dha lahore under 3 million. But no ray of hope. Even prism 5 marla plots are touching 5 million

    Reply
  38. Dear Malik Anwar Ul Islam
    I am regular reader of your blog that is very informative
    my question is when would be new laws become applicable
    still DC rates and old schedule of registration fees are being charged instead of fair market value and new schedule of registration fees which is less for filer

    Reply
    • Muhammad Shabir
      Last government introduced new taxes for real estate sector. Taxes were decreased but not implemented. New government is preparing the mini budget. Government will also review the real estate situation in Pakistan. Hope soon new laws will be implemented. D + FBR rates will be decrease soon.

      Reply
  39. Aisha Ali Naqvi

    on   said 

    Good blog about bad market situation.
    I am dual citizen living in States.
    Bought 1 Kanal plot in Dha phase 1 Islamabad in 2015 for 2 crore.
    Want to sell for 1.5 but no offer above 1.25 crore.
    I have lost big money. And still some people say market is good. Dealers are very bad in PAK. They never tell the real market situation which is down.

    Reply
    • Maam, DHA islmbd is not good for investment point of view, for investment only Lahore should be preferred and mainly DHA because private schemes will have always issues. Try to buy half cooked plots which have lowest risk factor and more gain factor. High value residential properties are never recommended for investment purpose as they will lose whenever better option will come in mrkt. i.e phase 9 Lahore average plot is 110-115 lacs if market goes down it will not effect this as phase 9 town 8 marla plot is around 100 lac already and when possession will be given to phase 9 after 2 yrs it will be around 150 minimum as it will be best phase in DHA at that time. Now if we compare it with phase 8 its non possession plots were more than 2 crore and if market goes down it will lose 20 to 30 lacs as better option of phase 9 is coming soon with less price and better layout.

      Reply
  40. Dear how much money is recovered so far by NAB..FBR..and supreme Court. Amnesty was over on 31July and aftr that how much is recovered so far..nothing just topi drama. What happened to Fawad Hassan fawad.. Ahd cheema.. Malik Riaz.. Sharjeel memon.. Dr Asim… Aisy truck ki bati k peechy lagaia Hua ha sb ko.

    Reply
  41. Nazish Fatima

    on   said 

    Dear sir,
    Active Tax payer in pakistan around 1 Million. now the law is over 5 million property a tax payer can buy.

    So it is beyond to understand that million of homes and specially open plot are being on sale then who will buy it? and how.
    Suppose an open plot DHA karachi 500Sq/yard around yesterday 10/09/2018 price is RS 4 crore. so i think it is very difficult for a tax payer to buy it from the white money.
    if any one tax payer can but it then it is not possible to buy one more plot for him , because very few people have white money such a big amount.

    But the question is :
    1) if i talk about house price at karachi any develop area like, gulshan e iqbal, gulistan e johar, nazimabad, north nazimabad, FB area, DHA, askari , malir cantt, PAF falcon, etc the price around fix like : 120 sq/yard = 120 lakh , 240 sq/yard = 240 lakh, 500 sq/yard = 500 lakh.

    one of the property dealer have told me to calculate price on lum sum basis price 1 sq/yard = 1 lakh. so one can easily make mind how much lakh he have so according to his range he can buy.

    if he have less of lakh the he can go to buy a PORTION. this is second option for buyer.even in karachi 120 sq/yard have two portion in one floor , i mean on 60/ sq/yard of one portion.and this approval is being paying under table money.

    sir if the bank have very strict restriction asking of money and NAB, Sc chasing the balck money , then still the market is not come down,
    you can check newspaper jang on sunday , you will understood the price i have mention is correct as per property advisor,

    property advisor told me that he dont have any cheap price of property for sale, still the owner are asking the price as i have mention above and no one is eager to reduce it.

    Reply
    • Nazish Fatima
      5 MILLION PROPERTY BUYING LAW
      The law is made to stop the black money investment in reality sector and force the people to become filers.
      NEWPAPERS
      Newspapers have lost lot of revenue as number of real estate ads have decreased.
      HOUSE PRICE
      House prices are falling and down in most areas across Pakistan. No one can dare to buy property with black money.
      MARKET SITUATION
      One real estate agent told me last night that he has almost zero income from real estate business. He wants to start a grocery shop. This is how market is performing now a days.

      Reply
  42. Zahid Ali

    on   said 

    I am struggling to withdraw dollars from my pakistani bank dollar account, although it is not a large sum.

    The bank manager asking
    1) produce job certificate and salary certificate
    2) All joint holders come to bank for biometric.
    3) tell us, where this dollars will be used.

    When geniune account holder are struggling to withdraw, it means that it would be more difficult to invest black money especially in real estate.

    Reply
    • Zahid Ali
      The new government has zero tolerance for black money. No one in Pakistan can dare to buy property with black money. Without black money property investment is decreasing day by day in Pakistan. The luxury and expensive properties are the real victims. SATTA days are over and only people with white money will buy properties. This will reduce the property prices as honest tax payers or filers have low purchasing power. So property market will keep falling to the point where housing is affordable again tax payers.
      Now property is for genuine buyers not for investors.

      Reply
  43. https://www.zameen.com/blog/heres-how-property-prices-behaved-during-august-2018.html

    This was published on Zameen.com today only and their numbers magicians are still showing an increase in prices. I am not sure where and how this data is coming from but some people are certainly not happy with operation on black money. I am also going to incur losses on my hard earned money in Karachi but i am happy this is happening in favor of end buyer and people would again be able to afford a home for their families.

    Reply
    • Umer
      It is very easy to make favorable graphs and present a rosy picture of real estate market.
      But market situation is very different.

      HOW CRACK DOWN ON BLACK MONEY CHANGES PROPERTY MARKET:
      Recently AMNESTY INTERNATIONAL NEW LAWS have changed the situation. DUBAI is the world’s #1 destination to park the black money. But as now Dubai government has to show the details of investors who bought properties has changed the market.
      Once per SQ FT rate in Dubai was AED 2,600. Now it has come down to AED 600.
      So property prices in Dubai have decreased by 75% since 2008.
      https://www.business-standard.com/article/international/dubai-s-economy-hits-rough-patch-amid-market-slump-falling-property-prices-118072200245_1.html
      https://moderndiplomacy.eu/2018/07/07/dubais-economy-is-melting-like-a-glacier-in-the-desert/

      ZERO TOLERANCE FOR BLACK MONEY IN PAKISTAN:
      How property prices in Pakistan can increase when NEW GOVERNMENT has zero tolerance for black money. I know the dealers who lost many transactions due to the issue of black money. Once daily transactions in DHA Lahore were 180-200. Now the latest figure is under 20. So daily transactions have reduced by 90%. How property prices can increase when transactions are so low.

      LAUNCH OF NEW PROJECTS:
      The launch of new real estate projects is record low as you can see many uncompleted projects.
      An apartment project was launched in Lahore in 2016. The developers have reduced the prices by 25-35% but the project is still 60% unsold. This is the real situation of property market.

      FUTURE OF PROPERTY PRICES IN PAKISTAN:
      Property prices are falling since 2016. Black money is out from real estate sector. So prices will adjust to the new buying power of the people with white money. All we know that honest tax payers have low purchasing power so prices will fall.
      Property worth under 5 million will have strong demand.
      Death of luxury property.
      The real issue is the time to invest again. The bottoming of property prices can take 3 months or even more. To avoid the further losses its better to let the property prices bottom out.

      Reply
    • Syed Abbas
      Yes, this is the best way to save the losses.
      We all should understand that with HALAL money no one can buy large homes in Pakistan.
      So the high property prices in Pakistan are just because of black money.
      As we all know that biggest threat to PAK Economy is the shadow economy or black economy based on corruption, money laundering and black money.
      SC, NAB plus NEW GOVERNMENT has zero tolerance for black money.
      When black money is out as non filers can’t buy property worth 5 million or more, so property prices will only fall.
      Its just the matter of time.
      MY FRIEND is a builder.
      He has brand new 3 homes in Lahore. Trying hard to sell since last one year but not successful.
      A few days back we met and he told me that one house he want to sell at 90 lac but got offer of 83 lac. I told him that sell home even if you get offer of 75 lac.
      he was shocked.
      I told him that who will buy your 5 Marla home at 90 lac when government will start building 5 Marla home for 20-22 lac.
      Business strategies change with the circumstances.

      Reply
  44. muhamamd azeem uddin

    on   said 

    Dear sir,
    thank you for writing very informative article. it has very deeply heart shaking that the property dealer are facing crucial period , being a Pakistani they are also my brother , so hope the market transction will be good innear future and they can make money.

    it has been heard that government is planning WEALTH TAX on property sector. kindly tell me what will be impact on property market ?? if possible explain briefly.

    Reply
    • Muhammad Azeem Uddin
      Wealth tax is imposed on rich people.
      In case of property wealth tax is imposed on the properties that are expensive.
      For example in UK there is luxury tax on expensive and large properties.
      This tax is calculated as 1 or 2.5% annually on luxury property.
      For example a property is worth 10 crore and wealth tax is 2.5%.
      So home owner has to pay 25 LAC every year as luxury tax or wealth tax.
      WEALTH TAX is imposed to collect revenue.
      Due to ban on purchase of 5 million worth property by non filers, high end properties in Pakistan are hit hard.
      This wealth tax will totally crash the luxury property market in Pakistan.

      Reply
  45. Mushtaq Hussain

    on   said 

    Many thanks for excellent blog.
    I am fed up with this wrong attitude of property dealers. I want to sell my brand new home of 5 Marla in Lahore. Dealers say property market is very good. But they have found no buyer for my home in last 10 months. I have reduced the price even.
    Only one dealer told me that market is very dead as he has even no rent deal in last 3 months.
    He told me that he has sold his car.
    Sir;
    Market is very down. Only good in books of property agents who are in market to loot us. Otherwise there is no buyer in the market. Shame for such bad dealers.

    Reply
    • Mushtaq Hussain
      It is reality that property prices are falling day by day. But very few people are reporting it.
      How can real estate prices increase when economy is down, dollar rate is high, unemployment is so high.
      40% real estate agents have closed their agencies. So dealers have sold their cars and houses. Many realtors are driving uber and careem. Property transaction in DHA Lahore are just under 10.
      This property fall is due to the crackdown on black money.

      Reply
      • yes prices are falling
        DHA Bahawalpur 01 kanal was on 28 lacs last month today selling at 33-34 still it is hard to get file.
        DHA Multan was 44-45 last month today is 49-50.
        Prism my plot 6 month before was 108 today am getting 120 lacs.
        Lake city residential plots have increased almost 10-20 lacs.
        in Dha 9 town average 8 marla plot is now at 95-100 while it was 75-80 last year.
        So prices are still falling. …..
        barrier of 05 million property for non fillers is being removed for overseas they can buy with affidavit mentioning zero returns as they are already paying tax in their residents countries.
        Only prices got affected where they were already unjustifiable and people bought blindly.

        Reply
          • kindly give us comparison of last 6 months, for properties your are advertising on your web to know how much these have gone down.
            kindly provide a detail of black money and corruption money recovered so far just for public knowledge to see the actual conditions.

          • Malik
            Property prices are down in DHA Phase 7 Lahore
            1 Kanal plot selling at 255 LAC in 2016 is now available at 190 LAC
            12 Marla villas LAKE CITY LAHORE old price 130 LAC now at 215 LAC
            DHA Karachi Kit Hard
            10 Marla property price in DHA Islamabad Phase 2 old price 105 LAC now at 85 LAC
            Bahria Town Lahore 5 Marla plot tipu block commercial old price 4 crore no buyer at 2.25 crore.
            Daily real estate transactions in DHA Lahore were 180-200 files in 2016 now only 10-20.
            Black money is out.
            Luxury high end property has no buyer in the market.
            Small size properties worth 5 million has good demand.
            My friend is trying to sell beautiful brand new houses in Lahore for 70-98 LAC but no buyer in the market.
            https://tribune.com.pk/story/1783397/2-speculators-tax-dodgers-targeted-real-estate-business-adjusts-new-regulations/

          • dear Phase 7 Lahore or phase 2 islmbad are location problems not current situation problems. people should know where to invest and when to invest. its part of business some properties grow and some come down even in normal conditions. Even phase 8 lahore came down but who told investors to buy no possession plots above 3 crore. these are called blind investments without knowledge and dealers/ bloggers they dont guide public. they are either in favor or totally against. Try to teach people how to invest in real estate.
            ap sirf SHO wala kam ker rhy hain.

          • Malik
            Location is not an issue
            Issue is black money crackdown
            New government has zero tolerance for black money.
            Location: LAKE CITY LAHORE recently got location boost due to LAKE CITY interchange on ring road but have to reduce prices of villas by 10 %.

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