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Long term Realestate Investment,

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   Habib
Wednesday, June 26, 2019 05:12 AM 
Reply: >
with the relaxation of LRE policies I am starting writing again , I am non resident Pakistani

I am long-term property investor, and have invested in almost all reputed housing societies in Lahore. The Rule of thumb had been if you invest in slump you have almost no chance of losing at least in terms of Pakistani Rupees,
I started investing about 13 years back and had versatile experience of buying but not selling. Especially residential , The Investment which I Bough About 10 years back are about 5 to 6 times growth in Pakistani Currency, the things were OK till 2018 when I invested heavily in prism after First devaluation of Nawaz Govt, at that time prices were 25% lesser than 2015 peak in Prism, In spite of having good purchases all my investments are 30% Low in terms of UAE Dirhams, In past 20 years my experience with Pak Currency was if it was devalued 10% it will stay so for another one year, it happened so even worst time Zaradari as well, In that time market would absorb impact of devaluation. This is first time we are seeing Pakistani Rupee going down and down again.
In last one year I have borne so much loss in terms of AED Currency that my 3 generations can be fed life long on that almost 50% shed on all holdings in Pakistan. Other who are holding will have same impact but my be unable to calculate, In Simple terms If I was Holding 3 Kanal Plots in DHA years Back, Today one of them is wiped out due to economic performance of Govt.
Point was to emphasize that Overseas Pakistani are main investors in real-estate and such a sheer weakness of Pakistani Currency will definitely a big -big factor for their long term investment decisions. To me It is far bigger factor than FBR rate or asset declaration.
Should it continue then Pak Currency will become worthless paper and all real-estate or high value Purchases will be done in Dollars and Rupee will be used just to buy Double Roti and Milk which will change rate every weak, Pakistan will Joint other Countries like Lebanon and Egypt etc. where property is valued in Dollars.
I am not sure what Current Govt is looking at but, From their Performance it is quite Clear that they have succeed to stop all types of business in Pakistan except Black Money exchanges.
Tariq ch replied on Wednesday, June 26, 2019 05:50 AM 

AoA
With due respect Dear Habib
These are overseas who made the life of common man of Pakistan difficult by illogical investments. More of them borrowed Bank Loan and invested in Pakistan.

I was owing and running a hotel in J.T Lahore. Its value was 2 million 20 Years back and monthly income was 40K only. It was difficult to meet my home expenditure.

I sold said 3 Marla commercial plot and someone purchased in 30 Million.

How can he draw 0.5 M from a business which was only running day to say expenditures 20 years back.

SUMMERY
Property prices are high as compared to their actual value. Illogical investments of overseas has destroyed business and has sucked last drop of blood of 70 % Pakistanies.
Tariq ch replied on Wednesday, June 26, 2019 05:54 AM 

Property business is over now for few years and U are expecting it's transactions in Dollars
Kh Qasim replied on Wednesday, June 26, 2019 06:12 AM 

Excellent article Habib Sb. You are 100% right. GDP of Pakistan was 305 Billion USD in 2017. Dollar was around 110 in 2017 and 160 now means more than 45% devaluation that shrinks GDP from 305 Billion to 210 Billion. GDP per capita of pakistan was USD 1547 in 2017 and we ranked 147 in the world around Bangladesh, Uzbekistan and Kenya. Now in 2019 after 45% devaluation GDP per capital falls from USD 1547 to USD 850. That will take us from 147 rank to 164 rank i.e. below Yemen and just above Ethiopia, Haiti and Rwanda. Now, I have started looking into the economy of Rwanda, Haiti and Ethiopia what people are doing there, how's real-estate market there and whats their source of earning. I will share the road-map with you all in near future. However, keep in mind that previously I used to think that it was due to 2 previous corrupt governments and their bad loans and this govt doing nothing wrong.? Now I realized it is due to the sheer incompetence of the current government and poor decisions that destroyed everything. They will take us to total collapse.
Consumer replied on Wednesday, June 26, 2019 06:12 AM 

What goes around, comes around
The overseas Pakistanis invested so much in property that the actual consumers can not buy property at such high rates. These investments actually deprived us from owning a house.
The housing sector should not projected as investment option. Those who invested should suffer and those want to buy and live should be accommodated. By the way Dollar is today at 162.
Habib replied on Wednesday, June 26, 2019 06:14 AM 

I could not understand your point, You mean you bought a Commercial plot in 2 Million 20 years back, and you would be more happy and country would be more prosperous if still its price would be 2,3 Million after 20 years, Nope it is not going to help Country neither people,
Main Focus of Overseas investments are World class Housing Societies in Sub Urban areas which is none of the business of Poor or middle class Pakistanis, These are the Parking lots of Money which is source of remittance and Jobs for Pakistan, I offered to one of my poor relative to live in a bungalow built in Izmir Town, He politely refused that neither he can come and go daily to work nor he can afford schools and tuition for his kids in these localities, Why don't you buy a small House in Gari Shahu and I will happily live there and Your investment will keep Going as well, If there will be no overseas investments there would be no Bahria of defense etc, There would be 10s of more Gari Shahu with Triple Story Houses,
These Housing areas we see are just Parking Lots of Money, Source of Remittance and some Jobs. In their absence overseas would be more interested in Investing in International Mutual Funds and offshore bank accounts form where they can wire the money anywhere and any time they need.
ABC replied on Wednesday, June 26, 2019 07:04 AM 

Now Start blaming overseas for Dollar at 162
Milo replied on Wednesday, June 26, 2019 07:05 AM 

Mashallah, this is the first time i have heard that OVERSEAS / REMITTANCES are Impacting negatively to the Country.
Just read the current Financial numbers / figures and surveys and imagine if those REMITTANCES would have been stopped.
Adnan Ali replied on Wednesday, June 26, 2019 07:13 AM 

100% agree with Habib and still worst is coming, because people are losing their jobs and income, And for survival they would not have any option except selling their land/investment at a throwaway price.
Consumer replied on Wednesday, June 26, 2019 07:47 AM 

Remittances should go into business developments, mutual funds and should not act as a tool to deprive the poor nation from housing facility by hoarding of plots for profits.
Anonymous replied on Wednesday, June 26, 2019 08:25 AM 

Mutual Funds Investment in Pak?
I invested 1 Million, 3 years back, and so far I suffered 0.3 Million Loss and rupee deprecation is separate :(
Khan88 replied on Wednesday, June 26, 2019 08:36 AM 

It was a well known fact, rupee was going to be depreciated against USD, in Nawaz government it was artificially over-valued.

I know overseas Pakistanis who realized this and took their gains while they could. Unfortunately real estate in a debt based economy (like ours) is prone to economic cycles i.e. property doesn't always go up. Timing is everything , just like everything else in life.
Rana A. replied on Wednesday, June 26, 2019 09:30 AM 

Salam o alaikum,
Habib bhai is write. But as he told that he had experience of 20/30 years then i dont understand why is he worried?
Everyone must know in business is name of profit and loss.
Now the prices are already stable esp.in dha. No more fall. Yes dollar is rising which giving loss to property value.
It's going to change as CMY explained InshaAlh.
Maximum 6 months, a very very big jump in teal rstate going to happen. Black money holders going to make white and again jump in business esp.real estate. Nawaz and Zardari are going to pay whiten 6 months InshaAllah.
Remember my words.
Who wants to buy , buy now. Make your black money, gold to white and just pay 4% to govt.
Believe me no country in the world having this kind of amnesty of 4% tax.
In europe is more than 50% with late intetests and fines if they give amnesty. Otherwise all blocked with jail and having biggest charges of money laundering, human smuggling, terrorism sponsering etc. Who will like all these allegations on neck.
And it's your land. Minimumly You also have to be playing and feeling Hero and Leader of your land.
Atleast we all going to answer our deed 8n dunya or in akhirah , sure 100% .

Please dont wait and jump in field and show yourself what you can.

Wa salam

Rana. A
Dani replied on Wednesday, June 26, 2019 10:01 AM 

and buy DHA Multan file in 63 Lakh from Rana Australia :)
Habib1 replied on Wednesday, June 26, 2019 01:35 PM 

People are being funny out here when they say in 6 months prices are going to rise? Bhai it’s already 5 folds high. From here it’s not upward trend it’s downward only. Prism which is underdeveloped and may take a decade or more to develop has whooping transfer charges . Who would buy such plots and wait a decade?.
When you talk about investment there are many other opportunities rather than buying property and see your hard earned money loses its value in terms of depreciation. 162 and still counting.

The developed areas like phase 5 and phase 6 have transfer charges that one can not even imagine to buy as an investment since return will take ages. From my perspective easy money is over, better sell properties ( if you could get buyers ) and do productive work. The fate of property is ominous for those who can see.
User_6006® replied on Wednesday, June 26, 2019 02:31 PM 

Corporates sucks soul from body , its selfish dirty mean sluggish harsh professional life with stress and mother of diseases.we need agric reforms and soft indutrialization , better societies ,better commercial , better export of agric and soft industry and our strong currency with better health facilites and good tax but better salaries.and peace.
Tahir USA replied on Wednesday, June 26, 2019 06:29 PM 

Habib's analysis is absolutely correct. I'm an overseas for over 25 years practicing corporate laws. Here some gentlemen are simply ignoring the global realities and mechanism of economies. Just wishful thinking will not bring anything 'good' except more miseries if you are not smart and intelligent to act in time. This is what current government has done though I myself voted for it. Its a sheer incompetence and chaos; only useless speeches in the Parliament; and no meaningful legislation at all. Lately in our local Masjid many professionals and highly educated Pakistanis are talking the same as described by Habib, and do not want to remit their earnings anymore back to the country. Good luck.
Thelma replied on Thursday, June 27, 2019 07:05 AM 

It is because of people expecting 3 times gain in their investments while sitting home doing nothing ,that Pakistan is In this economic crisis ...Why don't these oversearers invest in U.K. UAE,USA,....because their money will not multiply as fast ,...They only love Pakistan because their money will multiply at a phenomenal rate ,without them lifting a finger .something they can never dream of doing anywhere else in the world ....And they do us ehsan by calling it remittances ....If Pakistan stands on its feet ,which it will inshallah, we will not need yr remittances .....We will have our people investing in industries ,and not in pieces of land ,to get returns that will not only create jobs but we will be exporting to get the dollars that you were giving us as bheek in the name of remittances ...Inshallah Pakistan will stand up and fight all the free loaders ,free sleepers on our land ,Mufut khooras who were destroying our economy and yet making millions ....We will not need your money anymore ..God willing ...
Thelma replied on Thursday, June 27, 2019 07:12 AM 

He starts his article with " long term investor in property " "not long term investor in industry ."
So u were an investor looking for returns without lifting a finger ...that you proudly say increased many folds when the crooks were ruling the country ...so u were so happy with yr smart investment and happy u were doing A favour to Pakistan...Now that we have an honest head ,you r suffering ...good ..I'm so happy u will never invest in our property for yr gains ever again ....we don't need you ...
Rana A. replied on Thursday, June 27, 2019 07:29 AM 

Salam again to all,
@ Habib & Tahir, brothers i am also overseas since last 25 years and doing just business. But believe me what i found how easy is in Pak to multiply money, there is no where.
Yes, you are right , you have to be not only honest but also intelligent and hard working.

@Thelma, well answered and appreciate to have love for your land. You are right, there is no country in world which could multiply investment of some one while sleeping.
But Thelma, please dont take every overseas with same way. There are a lot who loves and their hearts beat with Pak. They feal pain when Pak not flourish. If today just will be stability in economic, you would see a lot overseas would come back with their earnings.
Arif replied on Thursday, June 27, 2019 07:44 AM 

Don’t forget our economy heavily relies on remittances. If oversees Pakistanis stop transfer their savings to Pakistan the situation will get worst. Though government admits importance of remittances but they have no sense and vision to foresee the negative impact of its current measures on remittances.
Thelma replied on Thursday, June 27, 2019 08:19 AM 

Rana sahib thanku...Arif sahib the hard working honest overseasers who love Pakistan and r not sending money to milk Pakistan but to help Their loved ones who happen to be Pakistani s..they r the silent builders of this nation ,who do not even know how their remittances r helping ..They will keep sending to their loved ones to invest whether in real estate or Business or just to support ....Theyr the real hero s and rest assured Habib sahib,thisepeople will keep sending ...because they r not sending it fir their selfish ends. They r sending money to their loved ones ,which in the end. Happens to be our dear Pakistan...long live Pakistan
The more people who were making millions CRY ,the more iim convinced that something is going Right for this country ...may yr millions go into the drains and may Pakistan make millions without yr brilliance..
Rest assured Pakistan is trying to stand on its feet. It may falter and u may clap in glee waiting for it to fall but the honest hardworking REAL Pakistani will hold its hand and make it not walk but RUN...
Consumer replied on Thursday, June 27, 2019 08:48 AM 

Remittances going into property just give a temporary boost but are bad for growth and economy of the country in the long run. Should Govt allow the property to remain tax free zone and undocumented, so expats can enjoy doubling their money.
Property market must come back from speculations to real value
User_6006® replied on Thursday, June 27, 2019 09:11 AM 

Govts need to understand property has its own three cycles and lomgest is slump so hovt should not aid by policies to keep it stagnant

We still need to make property 20 time more costly as our neigborhood cities Delhi,Mumbai,Dhaka ,chitahong ,kabul,tehran are.
To control population in major cities and to uplift small cities towns and agriculture.
People are bullshitting here.
Kh Qasim replied on Thursday, June 27, 2019 09:33 AM 

The trade deficit numbers for October 2018 have been released by state bank.
Imports = 4.8 billion in Oct 2018
Imports = 4.8 billion in Oct 2017
No reduction in imports after 30% devaluation and extra duties.
Our problem is excessive and useless imports which is using up all the dollars. Exports cannot be doubled in months so that is not a solution for the immediate crises. This crises is not due to loans but due to imports of 60 billion per year.

Even if we get 12 billion from IMF and some help from China, we will use it all up by June 2019. What happens after that ? If these imports are not stopped, there are only two possibilities (mathematically) by June 2019.
1. We default and declare bankruptcy or
2. Dollar hits 200 to a Rupee so imports are automatically curtailed but we go into hyper inflation like Turkey and Iran
Kh Qasim replied on Thursday, June 27, 2019 09:34 AM 

what are the useless imports that we are currently doing?
Many. There are two kinds. 1 things that we make but still import 2. Things we dont make but are useless. For e.g in the first category are things like Fans, exhaust fans, coolers, clothes, shoes, fruit, toys, motors, pumps, bathroom tiles, floor tiles, sanitary fittings, sinks, flushes, switches, etc. The second category are imports like fancy toys, sweets and chocolates, high end mobiles, LED TVs, perfumes, garments, bakery items, land cruisers, Prados, rugs, fancy furniture. Even simple toffees are being imported from China.
Ahsan Sattar replied on Thursday, June 27, 2019 11:46 AM 

There is one thing called "Real Effective Exchange Rate" REER. The REER of Pakistan was around 125 in 2017 when Pakistan was asked to bring REER closer to 100 for any negotiations with IMF. Pakistan since then started devaluation.
Currently (at 162) the REER of Pakistani rupee is 103. This is fairly close to 100.
The problem with our currency is as soon the government brings REER close to 100 mark it starts rising again, because of number of factors including the trade deficit.
It will be keep depreciating but at lower rate till end of this year probably. After that global recession to follow.
Best of luck!
(At 100 it is considered that the currency is neither overvalued or undervalued. Above 100 is artificially over valued currency and below 100 is undervalued currency).

About imports:
In terms of luxury items called as "unnecessary" imports in this thread, these items contribute to some extent to the import bill. When we people talk about imports we normally come up with "luxury cars" as the most unnecessary import yet total vehical import is 4% including all.
Mineral fuels including oil: US$17.1 billion (28.4% of total imports)
Machinery including computers: $6.3 billion (10.4%)
Electrical machinery, equipment: $4.3 billion (7.2%)
Iron, steel: $3.7 billion (6.1%)
Organic chemicals: $2.8 billion (4.6%)
Vehicles: $2.6 billion (4.3%)
Plastics, plastic articles: $2.5 billion (4.1%)
Animal/vegetable fats, oils, waxes: $2.1 billion (3.5%)
Oil seeds: $1.5 billion (2.4%)
Cotton: $1.3 billion (2.1%)

Our problem is we don't produce what the world demands.

PS: By the way we consume 15 liters of oil per capita. While world's average is 3 liter's. If we start consuming "NORMAL" we can save at least $2.1 billion of import and can even export edible oil :).
Adnan Ali replied on Thursday, June 27, 2019 11:59 AM 

Main reason for current crisis is Dollar speculation, our dear STATE BANK has decided not to interfere in dollar price. so As soon as USD reaches 140, brokers start saying it will got 160, and now it touches 164, brokers say it will go 180, so people who carry USD in their home, do not encash, same way an exporter are not bringing their money in Pakistan but waiting to usd reach its Peak value, same way this speculation caused people to convert their pkr savings into usd which makes usd shortage in market.

There is not much trade deficit difference in recent months as compared to 2017, 2018. every thing could be normal if STATE BANK does it role by controlling brokers/speculators and say clearly that it will do every thing to make pak rupee value stable.

For God Sake, please do not discourage investors, no matter PTI or not, this country belongs to every one.

Current govt has spent 1 year and same way next 4 years will also pass. Next time some other party will be in power.
Do not be a blind supporter of your political party and if they are doing some thing wrong, accept it instead of trolling so it could be corrected.
Ahsan Sattar replied on Thursday, June 27, 2019 12:20 PM 

@Adnan
There is one exchange rate called "interbank rate" and one rate called "open market" rate. The trade in money exchanges daily is worth around 10 million dollars (open market). While in the interbank (State Bank and commercial banks) its around 100 million dollars.
Who can influence the rate? Money exchanges?
Rana A. replied on Thursday, June 27, 2019 12:32 PM 

Salam to all,
It's a long time to read really intellectual discussion.
In my view we all having moral duties on each stage on each level whether we are in land or out of land.
Also no doubt, the overseas pakistani were and are sending and sending money to their relatives or for themselves but our leaders + bureaucrates took it back to west.
As to pray namaz, first of all we should have wadoo but unfortunately in whole muslima umah incl. Pak we are liars, cheaters, selfish and lazy. We don't like to work but we want to be richest in overnight while sleeping.
Nrw govt is speaking about Madinah but still i did not undetstand, " why did they not implement the laws of Madinah Walay kay".
E.g; In Islam tax is named Zakat. It is 2.5%.
Its also true our leader is honest but he has to make his left and right hands also honest, intelligent, hard working and inventors, not "Lakeer day Fakeer".
If some obe tells me we are stupid nation, i would not believe. But govt has to find out honest and appropriate brains. They can ask whole nation, " please write down your suggestions how to come out the economic and moral crises without age, sex or region distinction". And govt.has to select best hundreds or best 10 and ultimately best 1.
No doubt, when you try to catch a thief that would show reaction in all possible ways even to kill you for ones escape. So this happened and happening. But captain also has not to let his boat sink while fighting.
Inland paki's or outland paki's also have not to start collecting dollars and even dieing with fear of loss in other investments. They have to think one minute, we are brown and we would stay brown outsiders on western world whether we are having western nationalities. We are called there, browny or blacky. Is it true or not?
Govt.also should not make scary to businessmen or investors. It is human nature, each one wants profit not loss.
In my suggestion, govt. should give them guarantee of security in all the ways and convince them to pay most least tax in the world. Believe me, whole business world would run to Pak.
I hope this amnesty would help Pak, InshaAlh.

Crying people always cry whether is spring or autumn, winter or summer. Is it right or not?

World steping forward so we should also step forward with passion, devotion and hardwork.

Wa salam,
An overseas
Kh Qasim replied on Thursday, June 27, 2019 01:30 PM 

Myth is that Pakistani's don't pay taxes Reality is that Pakistan is one the most heavily taxed country. Last year FBR budget revenues of 4398 billion from direct and mostly indirect taxes. If we divide 4398 billion by 10 crore adult Pakistanis, then each Pakistani will pay Rs 52,776 tax (mostly indirect) this year. Now average income of a Pakistani is Rs 12000 per month according to Government figures. That means that each Pakistani making Rs 12000 per month has to pay Rs 4398 in tax each month. This is almost 37% tax. This also makes Pakistan the most heavily taxed country in the world, and the sad part is that burden is mostly on poor and middle class Pakistanis. This year the tax revenue collection is estimated at 5500 billion. You can not extract more tax from these people. Yes the tax can shift from poor and middle class to rich one's with correct policies. But the fact our income is not much (that is the issue). We need to increase our income. If we want to collect more than we need to create wealth. Yes wealth can be created. That is the only solution.
Good planning is based on correct assumptions. If the assumptions are based not on hard facts and truths, but on wishes, the plan fails badly no matter how good the intentions. A classic case is this year's FBR target of Rs 5500 billion tax collection. This is based on 4% GDP growth rate, 10% inflation and around 20% growth in tax collection. All three assumptions are not based on any facts, trends, historical data, FBR capability and incentives but on wishful thinking. Needless to say FBR will fail to collect these taxes by next year, will cause further demoralization of its staff and will face even more criticism in the media. This is called "setting up to fail". FBR has set itself up to fail. The entire budget is based on the assumption that FBR will collect 5.5 trillion in taxes, and hence the entire budget will fail to meet its targets, and most developmental expenses would be halted in the middle of the year as revenues wont be as much as planned. This cycle would continue and we ll find ourselves in an even more miserable situation a year from now. Why cant the assumptions be made more realistic or even conservative like 2% growth rate, and if the growth is more FBR will exceed its target making life better for everyone. But this wont happen because we as nation dont want to face facts but want to feel good for now and not worry about tomorrow.
Tahir USA replied on Saturday, June 29, 2019 08:51 PM 

@Thelma, your love for my Pakistan is highly appreciated, but we should come out of suc delusional mind set of mere wishful dreams? Kh Qasim has made his point very convincing being logical with facts & figures, and some corrective measures as well. Rightly stated that this is "setting up to fail". Being honest is a good personal trait but is of no significance when one is incompetent to deliver and impotent to act in time to manage the mess. They could have managed it much better but have planned to fail. Current leadership knew for over 20 years that our country has been plundered massively by previous rulers. People voted for better change in their lives, instead got more hard time. What a change! Good luck.
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