If you check 10 Years parity of US dollar value compared to UK pound, candian Dollar, Australian Dollar and Euro You will see starting from 2000 US Dollar lost some 40% Value vs these Major Currencies in 5,6 years. In That time Musharraf's Govt enjoyed that windfall and Pak currency Gradully devalued with US dollar but people did not see any major change, In last 6 Months Dollar Took a steep turn and not only further devalution stopped rather it gained 25% Vs this basket of currencies. At this time Pakistani New Govt is hot waters as they dont have finacial power to hedge against this change,At the same time Pakistan is also in Political Trouble as current Govt is neither Popular inside nor by Friends of Pakistan, [saying "bad Achaa Badnam Bura"]
These currency swings are never lasting as gamblers and manipulators cant earn money if they stay back, The only thing is no one knows the intensity of the swing or duration.
Soon it will be life time opportunity, to buy property in Pakistan as Moral of investors is very low, Few days Back one of my friend was Pointing to a new building in Abu Dhabi he said they are asking 200,000 Dhs rent [About Rs 4.6 Million] For 3 bed Flat. If he had this Much Money he could buy a 3 bed house in Posh area of Lahore where his next generations can live forever.
Overseas working in US and Gulf countries are enjoying the currency windfall their power of purchase has increased about 30% in last 6 Months. possibly, soon good buying may start in ready properties and houses.
Pardesi, Jeddah replied on Wednesday, November 5, 2008 10:06 AM
I agree that as soon as the signs of economy's bounce back emerge, property business will again rejoice.
However, I am trying to understand the logic behind your argument that "now expats are enjoying the windfall and earlier the Govt. enjoyed it", how will that trigger the property buying tend? When:
1. Govt. is failing to restore confidence
2. In the recent financial tsunami, many of the feasibility models (contemporary calculation methods) have failed. I tend to disagree that the history of currency fluctuation will repeat itself. |
Jameel replied on Wednesday, November 5, 2008 06:00 PM
Regarding winfall this is explaination
There are two types of buyers one who need shelter or end user and other investor, The End user like me are finding that the house which "was availble in 1 Cror 40 Lac in Mid 2007 is now available in 95 Lac" {I tell you later how Iam geeting it in 95 Lac]. It is big break for me who knows 1.5 ys inflation has increased about 30% the price of same house should have been About 1.8 Cror.
Now I explan how,
in mid 2007 House was 1.4 Cror [8.4 Lac Dhs]
in November same House is available in 1.25 Cror as seeing loss in investment the owner is rightly in hurry to sell 10% less price. Now I have to pay only 5.56 Lac Dhs, So price for me decrease 33% or almost remained 2/3, Rather in 1.5 ys it should have gone up so difference is even more than 33%. The end user like me is never thinking of reselling.
The other type of buyers are investors who are investing in future of property and get benefit only when prices start increasing in market. Their holding may or may not have residentail potential, These type of buyers still are out of Market and will take time to get Confidence. |
