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

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   Rehman
Monday, October 20, 2008 06:26 PM 
Reply: >
Rupee seems to have gained some value on Monday.Its being quoted at 82.50 in the open market and the pound has also come down to rs. 141 from rs.148 .

p.s.Its a slap on the face of all those who thought it was going to go to rs.100 to a dollar!
Khan replied on Monday, October 20, 2008 06:34 PM 

The reason it gained is because central bank has injected $200 Million dollrs TODAY in the market to stablize pak rupee. This stablizations is temporary.
2-3 weeks ago central bank had injucted $100 Million and rupee gained but only to keep on droping again in next few days.

Fall in rupee won't stop until fundamental problem is address and that is to stop capital fleeing from country. But it is very hard to stop capital fleeing from country given the problems that government is facing from so many fronts.
Sheraz replied on Monday, October 20, 2008 10:12 PM 

Khan, you are right about the fundamentals and they also say that most likely Pakistan is getting help from IMF and people know that too. This should atleast stop the free fall of rupee. Even for next 3-4 weeks people would like to wait and see the situation as compared to blindly buying dollars.
AHMAD replied on Monday, October 20, 2008 11:48 PM 

Since the rupee has devalued more 30 % so its means that property prices have already decreased by 30 %. I have been telling this forum for last two year that keeping in view the current prices level property is bad investment for short medium as well as for long term. The truth is there has been no change in prices since March 2005 when the property prices crashed in Pakistan. Last time when I came to Pakistan a good 10 Marla house in wade town was being sold for 60-70 laces and in dha also you could buy one kanal brand new house for 150-to 200 lacs . After one year although there is inflation rate of 18 %. Still you could buy the house in last year price. It's simply means there is no future of real estate in Pakistan. I have seen the real estate boom in USA after 911. Property dealer used to say ohhhhhhhh nothing will happen to property in USA and now everybody knows about USA real estate. Same is the case for UK. All of my friends who have invested in dxb real estate they are crying and bleeding. If I invest 70 lacs in buying a house in wapda town Lahore I can only rented it for Rs 25,000 . and after five years my house will be garbage I will have to pay property tax as well as income tax on the rental income I have to call my tenant every month to collect my rent . and if I get any bad tenant then rest of my life will be spent in court for vacating the house. but when u invest the same money in any Islamic bank then you could earn at least Rs 70, 000 after 10 % withholding tax without any headache being faced in rental business. So if u want to live in your house by yourself then you must invest in it otherwise do not invest in it for investment purpose. The real estate drama is over in usa and soon in Pakistan real estate will face the same situation what we have seen in usa . There is no future of real estate in Pakistan until and unless this drama is fully played. These are fake artificial prices. Pakistan's ground realities do not support the current real estate prices in Pakistan. Everyday is bomb blasts in Pakistan. Rupee has already been depreciated by 31 %. The inflation is so high more then 20 %. For last 9 months there is flight of capital from Pakistan to dxb. The KSE is totally dead. There is a strong rumor the Banks in Pakistan will freeze the lockers as well foreign currency Accounts. In Lahore alone 6000 mobiles were snatched on the eve of Eid...... And still if any body thinks property prices will increase then he is living in ...... These are my opinions and you have the right to disagree with me.
abj replied on Tuesday, October 21, 2008 02:02 AM 

There is nothing positive in the entire world as my friend 'Ahmad" quoted. that includes USA, UK and every country in the world especially when it comes to real estate. Thankyou for lifting everyones spirits, and being a --"positive influence"-- to the forum.

Since you could predict the future 2 years ago, where did you end up investing, as it seems you are currently cashing in on your dividents. Probably in an Islamic bank. Are you suggesting that the currency used in the Islamic banking is inflation free? Are they still handing out 'ASHRAFIAN".

By the way, a lot of people will agree that if prices remain steady for two years, that means the market has bottomed out for the most part. And there is a famous saying that, "When you hit rock bottom, the only option remaining is to go up". So that in itself is a good reason to buy, as it can only go up.

Newton said a long time ago, that things going up must come down. Let me add, that when they come down, they will bounce back up at some point. Simply, the 'Supply,Demand" has a whole lot to do with these fluctuations, and less with any conspiracies. People will always need land and a place to live, population is increasing, and land cannot be manufactured artificially. So, ultimately, it has to bounce back up. I think we are just working ourselves overtime over this. And Inflation is the talk of the day all over the world, not just Pakistan. We will all be fine, and live thru it. The finance gurus say to invest certain amount in real eatate, some in stocks, bonds, mutual funds, liquid cash etc. etc. So diversification is the key. Even if some banks in the camel land hands out :Asrafian" in this day and age, diversification is still important, as those "Asrafian" are not "insured" and not guaranteed they will keep coming. The only deposits insured are in US banks that insure deposits upto 100K, but pay you a lowsy interest rate, which cant keep up with inflation either. Almost same as keeping the money in your pillow cover. You loose some and gain some, and ultimately come out ahead, with a diversified potfolio.

Now you gave a count of mobile phones snatched on eid day in lahore. How about the proud Muslim Pakistanis that gave Zakat on eid day for a worthy cause. Anybody keeps count of that? I guess our minds need re-programming.
Asif A. K. replied on Tuesday, October 21, 2008 05:54 AM 

All the above discussion is true or false in terms of Long-term or short-tem investments. The current situation of pakistan and world-over dictates that if you want to invest for short-term here in Pakistan i.e approx one year then banking system is the best option, while if your investment is for long term i.e three to four years at least then real-estate is comparativley better option.

I have predicted previously on this forum that similar real estate boom shall not emerge in Pakistan in near term. However, in three to four years time, country econmic situation will improve which shall increase the liquidity within the country. Regular demand due to population requirements is always there, Govt investement is regular process now, hence such factors shall add up to bring back the 'Mini Boom' back in the country in next threee to four years. However, investers and genuie buyers shall be cautious next time, and emerging scenerio may not be taken as 'Boom'.

This is true that real estate prices have decreased in last on years when compared to Rupee strength i.e inflation. However, real estate prices tend to increase then they normally recover their value quickly compared to other investement opportunities.
Rehman replied on Tuesday, October 21, 2008 10:30 AM 

Overall, I agree with Ahmed's analysis. my question to the forum is whether the construction houses prices will go down furhter or is it the right time to buy the house.

Any feed back is welcome
Rehman(usa) replied on Tuesday, October 21, 2008 11:40 PM 

I am sorry but I cant agree with Ahmad sahib's views..Not only are they overly pessimistic they are full of negativity and defeatism!

I feel Pakistan will recover to a large extent from its economic difficulties and much sooner than most people think.Our currency is also due for a sharp appreciation which should be evident in the next few weeks.

Lets be realistic and yet positive and constructive and lets not spread our paranoid fears through this very useful and constructive forum!
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