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What I do if I am seller,

(105429)
Saturday, August 27, 2016 12:25 PM 

What I do if I am seller
The Top Line and Bottom line is that sale is standstill not because of Taxes but investors are not feeling that any gain will come in 2,3 years, rather loss is expected.
Almost 2 Months have passed and there is still no clear market direction, The demands prices have failed to decline. Most experts agree that prices will come down a bit may be 15 to 20%. However More Sure thing is that, they will not rise in near future. If I am a seller, and holding a plot in an “Inflated” area. Say worth 100 Lac in peak time. I must be sure that prices will not increase in coming 2,3 years at least, The Likely Hood % wise is that It may Come Down to 85 Lac in March 2017 [70% Likely hood] may fall another 10 lac and fall to 75 Lac in Dec 2017 [ Likely hood 50%] May not fall at all and keep hoovering at same level 25% Chance, Have another Kick in 2 years’ time almost no Chance.
In this scenario I will be benefitted if I sell it in 1,2 Months with 7,8 lac Bargain say in 92 Lac and Pay 5 Lac Gain tax. If My Plot is small and less than 40 Lac even Gain Tax Factor will be lesser. In market there are always buyers due to certain reasons. Make sure not to sell to investor on biana [ Currently market is full of these disputes]

If I am lazy or Long term holder then in 3 Years Price will be lesser than today and end of 4 years price will reach current value and then will start growing fast like cycle. That explains why in hype the gain gain is 200% annualized and why in long term the gain is 17,18 % annualized.

Again the Bottom line is that sale is standstill not because of Taxes which are just about 2 lac per 100 Lac Plot but investors are not feeling that any gain will come in 2,3 years, rather correction is expected.

Observer replied on Saturday, August 27, 2016 12:43 PM 

very pessimistic view/approach.
let see what it turns out to be.
lets take an example of a plot in prism worth 100 lac today. according to you it wil remain 100 lac after 3 years. question is where to accomodate LRR compltion, roads copmletion within prism. after 3 years more than 70% development work will be completed still plot will be 100 lac?

Observer replied on Saturday, August 27, 2016 12:45 PM 

where do you incorporate value addition factor?

Observer replied on Saturday, August 27, 2016 12:50 PM 

On top of it if you put 100 lac in bank account today after 3 years 100 lac will be depriciated to 75-80 lac in real terms.
may be any accounting person could apply a discounting formula to dertime future value to 100 lac of today

Observer replied on Saturday, August 27, 2016 12:51 PM 

we need to calculte opportunity cost as well here

Realistic replied on Saturday, August 27, 2016 12:52 PM 

Dear observer

What is likelyhood of DHA completing 70% of development work in 3 years considering:
1. Next 2 years are very slow for real estate.
2. Prism is x times bigger than phase 8 which took 10+ years (and counting) to get 70% developed . How can it take so less time to get developed?

Observer replied on Saturday, August 27, 2016 12:59 PM 

this likelyhood has been discussed in detailed several times before. a lenght debate to go into

Observer replied on Saturday, August 27, 2016 01:21 PM 

@Realistic bro just to inform you ph 8 was balloted in 2010 with a cash file rate as high as 38 lac and installment file at 55 lac. its been 6 years noy 10 plus. see rates today 225 to 250 lac and in W even as high as 300 lac despite deep land

Yasir replied on Saturday, August 27, 2016 01:37 PM 

Question for Habib sb & Realistic
Lets suppose if anyone has a good location plot in PRISM or phase 7. And at moment its price is 125 which is 135 2months back
He sell this plot according to your interpertation @110 today excluding taxes. And got Cash what will he do next?

Yasir replied on Saturday, August 27, 2016 03:15 PM 

My question is still unresponded habib sb?
You feel what you feel for yourself?
But I feel that there is no other option at the moment.
Rather than to through your excellent top Investment on this price. Better to wait for good gains. This is not a good timming to sell. As far as buying is concerned you got good deals at the moment to grab.
TIME IS CLICKING

Noman ahmed replied on Saturday, August 27, 2016 04:38 PM 

Buy in low price soceities like grand avenus. Very good location posession plot 10 marla 36 lacs. Within a year surely will cross 50 lacs.

FAA.awan® replied on Saturday, August 27, 2016 05:06 PM 

Here Very pessimistic views,Do n't lose heart.Property is the game of brave people not cowards.Very soon the taste of property will force the investors to come back in real estate bussiness.There is no other business options in pakistan as we are facing loadshedding,and many other problems which are not suitable for daily basis bussiness.In short , property is matchless and it is still attractive for better gain than banks etc.Wait a little bit more as the fog is to end sooner or later.

Arif M® replied on Saturday, August 27, 2016 05:48 PM 

Habib sb, I agree to your predictions about short term (6 months). However, what you said about 2017 is really pessimistic view. I do not expect prices to further fall in 2017 (unless GOVT introduces some new taxes next year). A lot will also depend that how FBR revises rates in June 2017. That will set perceptions for lot of things. But there is still lot of time for that.

As for now, I think futuristic properties will be mostly affected in this phase. OR the properties which are overpriced. However, I do not expect much drop in prices of properties in mature areas like DHA 1-6 or Johar Town surroundings that are already populated.

In longer term, there are so many factors on play here. Very hard to predict anything. Situation in Middle East, Europe. FBR revised rates next year. Govt and Ishaq dar policies in next budget. LRR development. So much more.

Habib replied on Saturday, August 27, 2016 06:11 PM 

The Whole discussion was based not on Tax But Cyclic pattern of real-estate Market not only in Pakistan but world over. Late 80s and early 90 Boom and then 1996 to 2001 Slump, Boom 2001 to 2004, Slump 2005 to 2011, Boom 2012 to 14 and stagnation in 14,15 and again a push in selected areas in in 2015, For Last some years Taxes were getting higher every year what if 2 Lac Gain in Transfer, This much gain properties were covering in 2 weeks during 15-16.
However Property will be final winner but new investors should realize that doubling prices in 6 to 8 Months were unhealthy and had to stop at certain point. Now Investors at peak prices will have to wait, People who missed the train in peak prices will get a chance in 1,2 years in lesser prices.

Yasir replied on Saturday, August 27, 2016 06:11 PM 

My question is still unresponded habib sb?
You feel what you feel for yourself?
But I feel that there is no other option at the moment.
Rather than to through your excellent top Investment on this price. Better to wait for good gains. This is not a good timming to sell. As far as buying is concerned you got good deals at the moment to grab.
TIME IS CLICKING

ShahzadQamar® replied on Saturday, August 27, 2016 06:47 PM 

Before this post I had opinion that Mr. Habib is a guy with very good analytical approach but this turns out to be wrong after this post. Anyways Habib saab no such thing is going to come in Pak real estate with all your expectected probability spreads. We are not in global slump.

User_6006® replied on Saturday, August 27, 2016 07:53 PM 

CMY audio also advocating almost what habib sb said , and i said almost same in bit confused words but a story i shared that ask local dollar of valencia they will say 2004 to onward good for Valencia , so i showed you a picture of surviving even in slump if come like or correction like 2014

CMY is different person than all other mean property gurus and investor who judge direction but hide it and act selfishly , first his estate really work on agenda of joining buyer and seller on decent term and get commission .

second he has passion to serve in his passion field which is property this is why he said in end of his audio that small budget people is suffering in real manner as prices increased enough no matter correction arrive or slump or we all get wrong here and further price increase the small investor would remain cornered

so i am waiting like many others for cmy to select low budget schemes that can gain shortly or in long term but cheap right now and authentic . even with all knowledge of market direction if you are low in budget you will be confused like me and awaiting for cmy to work for his roti and our's in current scenario as brands are easy to trust and with low budget you can't trust schemes as most wont fulfil any promise so no matter boom come in years those remain in slump all the time if not fraud .

cheers

Khalid Azad® replied on Sunday, August 28, 2016 03:19 AM 

Dear Habib & user 6006,
You can see my post nearly may June 2016, where I worn about this property Slump ahead. It's routine period. Taxes are not big effect it's due you can see abnormal high hype since last year.that are indicated some thing

Jameel Mughal® replied on Sunday, August 28, 2016 03:35 AM 

I Posted a reply but got error I Hope LRE team will Post user 6006 Can yo Kinley post link for CMY audio

AhmetKildir® replied on Sunday, August 28, 2016 07:29 AM 

The last slump was due to a global recession the likes of which we haven't seen in 65 years. The current situation isn't really a slump, it's more of a slowdown due to governments tax policies that resulted due to IMFs danda. Plus the big fish are transferring their money in Dubai as Dubai has reached the bottom of its correction and prices are expected to rise 10-15% annually from .

Myc replied on Sunday, August 28, 2016 08:10 AM 

@Jameel bhai
The audio link,
https://clyp.it/3afopppc

Bahtti replied on Sunday, August 28, 2016 08:31 AM 

Brother Ahmet, current situation is also global. Worst than past. That time there was no unrest in the region. Thousands has lost job in one day notice & big numbers are in row. Hundered of thousands are not getting salaries from last few months. Troops on border cost very high than troops in barracks. And when income also falls from $100 to $40 than we call global crises. A large numbers of Pakistanies are working in Saudi Arabia and impact will transfer to Pakistan. Food was the cheapest thing and the best luxury in Saudi Arabia but hard for those are job less now.

newbie investor replied on Sunday, August 28, 2016 11:04 AM 

Jameel Mughal sb waiting for your advice as i am your mureed and follow all of your advices religiously. Please do advise me about investment. Advise me about DHA Multan, Lahore or Peshawar, whatever you think will give good return in long term. thanks

Iftikhar Afzal replied on Sunday, August 28, 2016 12:50 PM 

1. There is a slump.
2. There is a cyclic slump.
3. Slump is not due to new taxes or it is due to new tax policy.

But in my humble opinion, there are very less number of purchasers (or investors) in the property market and the main reason behind this situation is that very less number of investors can give prove of their money being invested / or used is 'WHITE' for purchasing property.

Khawaja Qasim® replied on Sunday, August 28, 2016 02:36 PM 

Habib Sb. thank you for your post and all others who commented. The discussion will prove to be useful for prospective buyers and sellers. However, I would also like to point out that there will always be undervalued options available in Pakistan real estate market. People should look into it and follow Mr. CMY advices. Just an example 3 months back, Sector N 5 Marla file in Bahria Enclave Islamabad was available at 6 lac (+19 lac installments). Now same file current price is 14 lac (+19 lac installments). One month ago, I bought 2 files at 9 lac (+19 lac installments) in 1 month gave me a healthy profit of 10 lac in 2 files. No effect of taxes. Similarly there are plenty of similar or even better options still available and will always be available. So, look for that and invest in undervalued plots.
Regarding Prism and DHA other phases; there is so much development happening in Lahore it is hard to digest that 100 lac plot available today in Prism will be 80 after 3 years. Prism, Phase 6, 7 & 8 are excellent places to invest. Prices can remain stagnant, correction for a while but will grow in medium to long term. Mr. CMY said prism once developed will have prices equal to Phase 6 and 8. So, lets be optimistic IA there will be steady growth in 6,7,8 and Prism in next 3-4 years.

SaeedUSA® replied on Sunday, August 28, 2016 04:28 PM 

i posted this back in june...

SaeedUSA® replied on Saturday, June 25, 2016 10:44 PM PST

Very good analysis by RaviaGIk but forgot one thing that Pakistan own political situation is not good. After Eid will be big show down.If you look at the interest rate chart for Pakistan since last 15 years and you will see crash of 2005 and 2016 are almost same. Back in 2005 same time interest rate was 6 % and started going up and realestate went down.I am thinking that interest rate will be going up very soon or may be next year..my two cents.

alpha replied on Sunday, August 28, 2016 07:44 PM 

Global GDP growth in the six of the last 8 years is below 20 year average. Commodity prices are down 28% since 2014. Much of the global growth post 2015 is due to China and emerging Asia. China's gross capital formation while explosive in the past, is slowing down in future. Interest rates have fallen to historic lows. Global ( and Pakistani ) debt is growing faster than GDP.

alpha replied on Monday, August 29, 2016 05:29 AM 

@Kh. Qamar, 100 Lac plot is NOT available in Prism today. It will be available after 7 years. The value of growth in Lahore infrastructure is already built-into the current price

Furqan replied on Monday, August 29, 2016 06:42 AM 

@alpha, my poor little fellow i can understand the burn you are suffering from. may ALLAH grant you sabar

alpha replied on Monday, August 29, 2016 07:05 AM 

@Furqan, thanks for the prayers - but I am good - no burn other than your flame. I wish, pray and hope that Prism 9 grows as many people have invested their life savings. Just stating the fact. Kh Qamar has studied finance - he would know that future growth value of an asset in efficient markets in built into current price. DHA Lahore is an efficient market

User_4021® replied on Monday, August 29, 2016 08:30 AM 

Price is expected to remain stable for at least one year and will probably see some correction. In southern Lahore price is expected to appreciate but obviously at slow rate. I have observed and met with some Investors and many of them are looking for other options at the moment. So simple is that property market gain will be nominal after paying all taxes.

AhmetKildir® replied on Monday, August 29, 2016 09:43 AM 

@Bhatti, no idea what your talking about. This isn't even a recession yet and your comparing it to the global recession of 2008. =)

Saudi seems worse affected. But oil prices have been down for a year now. Pakistani Property market slowed down only after the recent taxes otherwise there were Q/Q gains for the last 3-4 years. Investors saw gains somewhere else and transfered their money. Job market outside Saudi isn't as doom and gloom as you say it is. $40 from $100! Give me a break =)

I think there aren't any buyers in the Pakistani market but there aren't too many distress sellers either. At least I am not able to find a 'location' plot in Prism for 110.

AhmetKildir® replied on Monday, August 29, 2016 09:44 AM 

And congrats to Ishaq Dar itni achi khaasi market daba di usnay.

Babar® replied on Monday, August 29, 2016 12:39 PM 

I am next to Mr. AhmetKildar, present situation is only due to the tax issue, most of people even expats were not buying every month a new plot but most of them were busy "selling and buying" means switching their existing properties. Of course there are always new buyer in Market but fewer and now they are just waiting to catch a desperate "fish" and many here are just propagating artificial panic. if one sell his prime location property due to the recent situation, than where else to invest?

Babar® replied on Monday, August 29, 2016 12:44 PM 

All friends who are crying recession recession, have any one of them visited DHA Lahore office on 30th, June 2016????? Why that recession have promptly started onward from 1st, July 2016???

UG replied on Monday, August 29, 2016 01:07 PM 

Please evaluate for me the price of X224 in dha phase 7. Thanks

Usama Javed® replied on Monday, August 29, 2016 01:11 PM 

Some sane voices at least from Ahmet and Babar. keep sharing your precious knowledge.
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