Finally NO AMNESTY for real estate sector
Since the last few weeks, there was much hype of amnesty scheme for Pakistan reality sector. Everyone had own views about the coming amnesty scheme. According to realtors and sellers, amnesty scheme will increase the real estate market activities and price will rise with more profit. According to genuine buyers, it was bad thing as property prices will increase again and genuine buyers will be unable to buy properties.
But now finally, IMF has made it clear;
‘There were no considerations for Real Estate Amnesty Scheme, as FBR has no power to introduce amnesty scheme. If government ever wants amnesty scheme, it has to pass through Parliament’.
No amnesty and its effects on Pakistan property sector
NO AMNESTY / What it means for real estate sector?
We have already seen 80-90% fall in real estate transactions since June 2016. Prices were falling and will keep falling. Prices are falling as no one can invest black money in real estate sector, as FBR is asking the source of income. What we will see in the future is the buyer’s market where properties are more and buyers are less. Buyers will get cheap deals due to lot of options. So we will see more price fall. Ghar47 stands by its words that property prices will fall by 35-50%.
NO AMNESTY / What it means for realtors?
This is not good news for real estate agents. Realtors thrive on high property transactions as their profits increase. Realtors will see low revenue due to low business. Many real estate agents have closed their offices in top housing schemes. Realtors should just understand that old days of high margins are long gone, but routine business will still be great for true realtors.
NO AMNESTY / What it means for sellers?
Sellers are already finding it difficult to sell their properties. Sellers are reducing the asking prices to get out of the sinking ship but to no use. Sellers will find it now more difficult to sell properties due to less willing buyers to pay for highly inflated prices. So sellers will have to reduce more prices to sell their properties. At large, sellers will be at disadvantage.
NO AMNESTY / What it means for buyers?
Genuine home buyers are at the advantage. Now genuine buyers will fix the property prices according to their affordability which is a move towards real market; a market which functions on demand and affordability. Real home buyers will be able to buy properties at low prices now.
More price fall is coming
In the absence of amnesty scheme, prices will definitely fall. We have already seen property price fall in Karachi, Lahore and Islamabad. But this is not the end of story. Prices will keep falling to the level where people with white money can afford to buy properties. How property price can be so high when no one can pay for it?
Pakistan real estate sector is moving in the right direction
Pakistan real estate sector has changed forever. No more black money in real estate sector. No more day-trading in real estate sector. Now property is for living or commercial uses.
Gold, shares & real estate are the top hedges against inflation and also the best investment options. But real estate sector has outperformed all other investments in Pakistan. Real estate sector is still the best investment option but the days of overnight profits are over. Now people will get rewards on 3-5 years investments. The other good option is the rental income.