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Property in comparison to dollar.,

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   Adil
Monday, December 17, 2018 09:10 PM 
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Dear Readers,

I would like to get your feedback regarding buying property in current scenario . Is it feasible option ?while all indicators are directing towards property crash.

Would appreciate if logical discussion based on ground reality is initiated.
Mirza replied on Monday, December 17, 2018 09:35 PM 

Dollar will touch 150 Or Max 160 in 3 months to 7 months.

While coming to property. Don't buy files/plots where only investors are playing. Its very risky.

OR Buy property with handsome rental income (6%+) and some growth potential based on on ground realities. If a property increase 14% in its value and gives 6% rent. Overall it will be 20% per anum. I think its not bad.
Mirza replied on Monday, December 17, 2018 09:37 PM 

Also note downside risk. property may not increase in value for next 2 years.

My analysis is based on Lahore's Market.
Khan88 replied on Monday, December 17, 2018 10:07 PM 

Saying if for a while now - stay clear of property
Tahir replied on Tuesday, December 18, 2018 03:48 AM 

In relation to dollars with property, we need to see history taking any property into account. Phase 9 property in 2005/06 was in range of 40-45 lacs while dollar was in range of 60-65.
Thus making file trading at around 67k $. These dollars as of today makes 94 lacs + 19.5 development charges make 1.24 crore.
The good location plot in phase 9 comes in this range. So to make break even with dollar one must have a Good location plot.
Those were peak time of property and so is the case these days and we all know what happened afterwards.
So in my opinion buying property at right time and getting out of it is the crucial factor. I hope stucked people would have bought properties in 2011-12, else it would only be profitable for them in next boom, since property bubble may burst. When ? Only time can tell.
Sleepless replied on Tuesday, December 18, 2018 04:23 AM 

So is it a good time to sell? I have some commercial property in Islamabad, which is providing me good rent. It has appreciated considerably but I think the rent is low as per potential. But rather than keep it empty, I rented it out. I am currently making 6% per annum (calculating at the price I bought it for, not what it is worth right now) rent on it - and rent is increasing 10% every year. So I will hit close to 7% in the early half of next year.

Looking for advice on what else is there in the Islamabad market to invest in? I can only invest in Islamabad, because I do not have spare time to explore options in other cites.
Adil replied on Tuesday, December 18, 2018 05:12 AM 

Best of luck in selling in such volatile market
Khan88 replied on Tuesday, December 18, 2018 08:41 AM 

6% yield is quite decent - I wont sell if I was you.

Some opportunity to make some cash in dha valley - balloting is due on 23 december.
Adnan replied on Tuesday, December 18, 2018 12:00 PM 

So there are two ways of looking at it, first is whatever everyone is saying, dollar goes up, property value comes down unless the property market is booming. I bought properties that have more than doubled in the past few years, but in terms of dollar value, probably at the same value. Alternatively put the money in the bank and with current interest rates, you earn nothing. So if you are living outside of Pakistan and can buy property wherever you are, its a better bet than buying in Pakistan. The flip side of the coin is, your bank dollars are currently worth a lot of rupees and property is down, so for an investor, its a pretty good time to buy. Unless of course you don't want to live in Pakistan in the long term in which case, you don't want to buy property here and get stuck with it. In my opinion, the current property market challenges in Pakistan also present opportunities for the investor in the longer run. Dollar price is expected to go down in the coming few weeks, not up. The slide is the result of lack of confidence which should come back with the IMF and other programs plus foreign funding that are all being finalized currently. So upto the investor to take a risk and make some money or stay away. In my particular case, I am staying away for now and looking to buy some property where I live. However, I have investments in Pakistan and keep a close eye on their market vis-à-vis dollar value. Over the past 8 years, I have made more money than the bank would give me interest on, even with the declining rupee dollar parity. But its a game of long term investments. Anyone looking for short term gain will be disappointed.
Khan88 replied on Tuesday, December 18, 2018 09:16 PM 

Pakistan is going through monetary contraction (rising interest rates/inflation and devaluation of currency), this coupled with the fact that people, a considerable portion who have ill gotten gains do not want to be investigated by NAB and FBR and are unlikely to invest,circulate money in the economy,

You have to be very lucky to time the market, majority in the world fails at this.

On another note, much of previous unrealsied gains will be lost as ruppee devalue further meaning you barely made any money above the marginal interest rate increased. I say bring this on, we need this to happen for economy to become productive.
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