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Looking for certain features

Pakistan realty market has no end user

By

ANWAAR UL ISLAM

Posted in Pakistan Property Guide On Sep 05, 2020
Pakistan realty market has no end user:
Insanity is doing the same thing over and over again but expecting the different results. Once again the government has offered another amnesty scheme for the real estate and construction sectors. The aim of the current amnesty scheme is to offer; firstly another chance for the people with ill-gotten wealth to be filer and secondly to provide the jobs for the daily wagers. But history shows that all amnesty schemes have failed in Pakistan. This scheme has already failed as Pakistan realty market has no end user.
Who are the End Buyers or End Users?
In a typical real estate market properties exchange many hands. This is due to the selling of properties for profits. Some people sell properties within months of the purchase whereas others in years. But eventually plots or houses are bought by the people who are not investors but buy for living purpose. These people are known as the end users. The end users have huge impact on the real estate prices. High demand from end users increases the property price and vice versa.
Who are the End Users of Pakistan?
Pakistan is among the countries that depends on the foreign remittances. Nearly 10 million Pakistanis live in America, Middle East and Europe. Yearly remittances sent by Pakistani expatriates are more than $20 billion. Most of the money ends in the real estate sector. So first end users in Pakistan are the expatriates. The second group of end users is of local Pakistanis including the businessmen and professionals. These two groups are responsible for the most real estate transactions in Pakistan.
Pakistan realty market has no end user due to the declining purchasing power:
Unemployment is widespread in Pakistan. Experts have predicted that Pakistani unemployment due to COVID-19 will be 30%, highest in the recorded history of Pakistan. Pakistani economy has also contracted first time. Local Pakistanis have seen massive purchasing power decline. The Pakistani expatriates are also not well off. Hundreds of thousands of Pakistanis have lost their jobs in UAE, Saudi Arabia, Europe, UK, USA, Canada and Australia. Foreign remittances are already low. This means less people will be investing to build homes or buy plots. This will result in mass unemployment for the daily wagers and also real estate prices will crash. Cement sale is already 37% down, a very disappointing indicator.
End Results
Global real estate market has already crashed. In US and Europe people are leaving cities and real estate transactions are record low. Due to unemployment, people are unable to pay the mortgages that will further crash the property prices across the globe. High end luxury properties are the real victims due to the declining purchasing power. The situation in Pakistan is not better. Investing in Pakistan real estate property is very tricky as speculation is very high. Small properties are exchanging hands but no buyers for the luxury properties. This amnesty scheme will temporarily increase the real estate prices across Pakistan but in the long turn prices will crash as there are no end users. Therefore buyers should be very careful.
Recommended:
Ordinance for the Construction Industry of Pakistan
 pakistan property market forecast, Pakistan property news, Pakistan property price trends, pakistan real estate, pakistan real estate forecast

18 Comments

  1. Jamshed

    on September 5, 2020 at 7:01 am said  

    Anwaar

    U are absolutely right. There is a property crash world wide . I just bought a property in DIFC, Dubai . This property was 5. 1 millions Dirham when this was launched . I bought in 1.15 dirhams . The rent of this property was 200 K plus dirham and now is 90 K Annually . Now u can imagine

    Reply
    • ANWAAR UL ISLAM

      on September 5, 2020 at 3:27 pm said  

      Jamshed
      Thanks for sharing the condition of Dubai Real Estate Market.
      In Pakistan situation is very difficult.
      Opposition is working hard to put Pakistan on Grey List of FATF.
      Many laws are coming to curb the black money easy flow.
      This are very bad in Pakistan.

      Reply
    • Imran

      on October 10, 2020 at 2:36 am said  

      I don’t know where you got the information that property crash is world wide. In Canada since the last 6 months house prices have sky rocketed by 40%, never seen such a huge increase in history.

      Reply
  2. Jamshed

    on September 6, 2020 at 2:48 am said  

    Anwaar

    Properties in Dubai are very affordable now a day. Such a lower price was seen a decade ago after the 2008 recession . Most of the local and international investors, End users are buying in UAE now a days because this is a buyer market . Prices are nearly at the bottom. Prices are 50 to 80 percent down compared to the peak prices

    Reply
    • ANWAAR UL ISLAM

      on September 6, 2020 at 6:10 pm said  

      Jamshed
      Pakistan real estate will witness the same trends.

      Reply
    • ANWAAR UL ISLAM

      on September 7, 2020 at 12:11 am said  

      Jamshed
      Pakistani Housing Market is also out of proportion in term of home sizes.
      US has population density 35 people per sq kilometres.
      But Pakistani population density is 275 people per sq kilometres.
      But we are building even bigger houses than USA.
      Correction is long overdue.
      We have wasted a lot of useful land.
      Flats will get more momentum in the near future.
      So lot of changes in term of size and affordability are in the store for Pakistan real estate market.
      https://www.zerohedge.com/economics/american-housing-market-splintering-houses-get-bigger-and-apartments-get-smaller

      Reply
  3. Zia

    on September 16, 2020 at 10:22 am said  

    I can’t see any reduction in price even DHA Lahore recent ballots are also on much appreciated price. See link
    https://ballotapp.dhalahore.org/

    So moral of story is all economic theories fail when it comes to pakistan realestate market. I believe should not waste time and money with day dreaming of price reduction.
    Zia

    Reply
  4. Waseem akter mirza

    on September 22, 2020 at 12:01 pm said  

    very good article on the real estate situation in Pakistan, as per this article prices needs at least 50% correction for betterment of economy and people.
    https://profit.pakistantoday.com.pk/2020/07/11/why-and-how-much-pakistanis-overinvest-in-real-estate/

    Reply
  5. Muhammad Nazeer

    on October 2, 2020 at 6:00 pm said  

    Dear Anwaar, On 1st October 2020 OPF commenced construction of 1 Kanal country homes in Zone-V Islamabad price Tag PKR: 27,500,000. (2 core 75 laks) Your comments and advice will be highly appreciated.

    Reply
    • ANWAAR UL ISLAM

      on October 2, 2020 at 10:53 pm said  

      Muhammad Nazeer
      at 2.75 Crore its a good option.
      But only thing to consider is the quality of construction.

      Reply
      • Muhammad Nazeer

        on October 3, 2020 at 8:16 am said  

        Dear Anwar, Thanks for your prompt reply. Nespak is a contractor developing country homes OPF valley Zone-V.

        Reply
  6. Muhammad Nazeer

    on October 3, 2020 at 9:15 am said  

    Dear Anwaar ul Islam, what your expertise predicts if the properties price to be down incoming year, especially in Islamabad. Thanks

    Reply
  7. humayoun

    on October 8, 2020 at 5:49 am said  

    Unlike other small investment opportunities in Pakistan, you need a fair amount of finances to invest in real estate. The healthier the finances, the healthier the returns. The method you choose for your investment can make it a success or a failure.

    Reply
  8. Muhammad azeem uddin

    on October 9, 2020 at 2:25 am said  

    Pakistan Property market is just like stock market of the country.
    No one can predict it.

    Reply
  9. Muhammad azeem uddin

    on October 13, 2020 at 7:34 am said  

    Dear Anwar sb
    It comes to my knowldge that government have issued two ordinances regarding Real estate sector due to FATF pressure.
    I will request to you please through light on it and if it ling then make blog details.
    Regarding naya pakistan housing scheme.. have any one get home or just govt sells form and make money from poor Pakistani ???

    Reply
  10. Muhammad azeem uddin

    on October 13, 2020 at 1:24 pm said  

    Dear anwar sb
    It has comes to my knowldge that government has announce two ordinance regarding real estate.
    Kindly put your opinion and impact on real estate price.

    Reply
    • ANWAAR UL ISLAM

      on October 17, 2020 at 11:52 pm said  

      Muhamamd Azeem Uddin
      The law is to force the real estate agents, builders and developers to keep record of real estate transactions including the identity of the buyer and seller.
      The aim is firstly to stop the money laundering and secondly to check the status of the buyer / seller as filer or non-filer.
      This law will definitely discourage the black money investment in realty sector.
      So prices will crash in future.

      Reply
  11. Ahmed

    on October 14, 2020 at 2:37 pm said  

    gulberg Islamabad prices are down 10% in the last 3 months.

    Reply

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