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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

60 Comments

  1. 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
  2. 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.

  3. 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
  4. 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
  5. 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
  6. 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
  7. 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
  8. 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
  9. 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
    • rizwan

      on   said 

      KHI BROKERS R A MAFIA WHO DO NOT WANT PRICES TO FALL SO STAY PUT DONT BUY ANYTHING PRICES I HOPE WILL FALL IF PPL STOP BUYING….AT THE MOMENT THERE IS VERY LESS ACTIVITY IN MARKET

      Reply
  10. 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
  11. 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
  12. 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
  13. 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
  14. 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
  15. 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
  16. 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
  17. 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
  18. 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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