PAKISTAN REAL ESTATE FORECAST 2020
2019 was a bad year for Pakistan Property Market as prices continued to decline but worst is yet to come. Buyers / investors want to know about the best time to start investing. Whereas sellers want to know that why their properties are not attracting the serious buyers. This blog will answer all questions with Pakistan Real Estate Forecast 2020.
CURRENT TRENDS OF PAKISTAN REALTY SECTOR:
Volume of Property Transactions
Volume of real estate transactions is the best indicator about the market condition. Currently transactions are record low. In 2016 there were 150-200 daily file transfer in DHA Lahore but now only 15-20. The situation is the same in other housing schemes and localities. Low real estate transactions means low investment that leads to price decline.
Condition of Real Estate Agents
Estate agents are worst hit by the slowdown of real estate market. About 40% realtors have left the field due to extremely low income. Agents turned investors have sustained huge losses due to price crash. Realtors claim that recent property crisis is more severe than the property price crash of 2005/6.
Market Shifts from investors to genuine buyers
In Pakistan property files were traded as the stocks and shares on daily basis. But now property market has moved from investors to genuine buyers. The only buyers in the market are those who want to buy a property for living. This shift has also ended the speculation so prices are cooling down.
THINGS THAT WILL IMPACT PAKISTAN REAL ESTATE MARKET IN 2020:
FATF pressure to control black money
Globally real estate sector is hailed as the safe heaven to park the ill-gotten black money. In Pakistan people were used to invest black money through Benami Assets. But things have changed now as government has made the laws to curb black economy due to the pressure from FATF. The efflux of black money from realty sector will decrease the property demand so prices will crash.
Political stability is very important as investors hate uncertainty. People never invest in countries with political crisis. Pakistani political situation is very bad as there are regular protests against the government. Even there are news that parliament can be dissolved at any time. Under these circumstances we can assume that where property prices are heading.
Economy also plays a major role in determining the property prices. Booming economies create good paying jobs. People move to the areas for aspiring jobs and real estate demand increases. High demand means high property price and vice versa. Currently Pakistani economy is not stable so don’t dare to bet on property price increase.
PAKISTAN REAL ESTATE FORECAST 2020 PRICE TRENDS:
Since 2016 property prices are approximately 25-50% down. DHA Commercial Broadway Lahore 8 Marla / 200 SQ Yards plots were selling at 12 crore but now no buyer at even 5 crore. DHA 9 Town 5 Marla plots are now selling at 50 LAC; declined from 85-90 LAC. DHA 9 Prims Plots are selling at 30 LAC. Same trends can be observed in other phases.
The efflux of black money has totally crashed Dubai real estate market as prices have declined by 75% from the peak of 2008. Pakistan realty sector will observe the similar trends. 70% decline from peak of 2016 is not impossible. So be ready for another 25-50% price fall from the current level.
WHAT SELLERS SHOULD DO?
Sellers are in worst condition as it’s hard to find the serious buyers. Sellers have only two options. First option; sellers with holding power should wait for the prices to rise again. Second option; sell property at some loss now to avoid huge losses in the future. Wait is like a poison for the sellers.
WHAT BUYERS SHOULD DO?
Buyers and investors should know that property market has cycles of 10 years. First property boom in Pakistan was from 2003-6 and first crash was from 2006 to 2009. The prices started rising again in 2013. So another boom will be observed by 2023. Wait will reward the buyers.