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Lahore Real Estate Forum: Property News & Community Talk : ,

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   thinker
Sunday, October 17, 2021 10:01 AM 
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With increasing prices of cement, bricks and steel, and further devaluation of Rupee, what do members think about the future of construction activity in Pakistan
Azzzha replied on Sunday, October 17, 2021 02:21 PM 

V bright
Cons replied on Monday, October 18, 2021 04:01 AM 

Its is not the first time inflation hit, Dunya chalti rehay ge :)
Arhum Arhum replied on Monday, October 18, 2021 06:14 AM 

Builders will keep building as long as there is demand and right now there is still high demand. Even when demand returns to normal (pre covid levels), there will still be genuine customers who want houses. We are still facing an annual growing housing shortage so construction activity will never die out in years to come because people need a home to live in and markets to shop at.
Rizwan replied on Monday, October 18, 2021 06:43 AM 

Now it has become expensive. There should be an alternative way for affordable housing like apartment buildings. Demand of 3 marla houses will increase as it is the only last option in cheap housing.
alpha replied on Monday, October 18, 2021 07:44 AM 

Mortgages will become more common I guess
Arhum Arhum replied on Tuesday, October 19, 2021 06:03 PM 

Rizwan, current hike in all construction materials is due to various reasons. Internationally, commodities have become expensive as supply has lagged and failed to meet sudden demand after covid lockdowns leading to higher construction costs and secondly, government relief has also led to sudden demand increase and higher prices. These effects will be short-lived.

As for mortgages, government is trying to encourage banks to lend more to construction as well as private sector but after lending fiasco post-Musharraf era, banks are very reluctant to lend money to private sector and much more happy to keep their money in long-term bonds which are risk free. I don't think mortgages will become common until Pakistan's closure laws drastically change and become profitable for banks (as in US).
Malik A replied on Tuesday, October 19, 2021 10:43 PM 

Cement sales are already down 12% in Sept showing the long term trend. But increase in price of cement and steel may start easing in 9-12 months as Intl Commodity Mkts/Supply chains return to normal.
Malik A replied on Tuesday, October 19, 2021 10:45 PM 

Cement sales are already down 12% in Sept showing the long term trend. But increase in price of cement and steel may start easing in 9-12 months as Intl Commodity Mkts/Supply chains return to normal.
alpha replied on Wednesday, October 20, 2021 04:13 AM 

aluminum forward contracts are at all time high - aluminum is a better predictor of inflation ( than copper ) since it requires smelting etc. Cement , steel cartel barons of Pakistan will keep on milking it till the international prices come down - which may be a long haul
Arhum Arhum replied on Wednesday, October 20, 2021 08:10 AM 

Indeed alpha, lots of commodities are at all time high prices. But this is because of sudden increase in demand due to covid relief measures including lower interest rates. Demand will return to normal as we are already seeing increasing interest rates and other measures to reduce inflation, so demand will go down and come to normal levels again. On the other side, supply is also trying to catch up to demand. I don't know when or in how long demand will return to normal but hopefully very soon in a couple of years.
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