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

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   salman
Tuesday, February 3, 2009 08:50 AM 
Reply: >
suppose one invest one crore rupees in DHA or any Housing scheem and other simply get 14lac per annum profit/mark up from bank deposit.question: who will earn more? :h
Waqar Latif replied on Tuesday, February 3, 2009 09:03 AM 

Yes you are right.. but you must know the rupee can get devalue, while your property is not.. & the prices go up with the passage of time. for detail you can compare prices of the property 5 yr back with today's prices

btw there are scheme from where you can get upto 18% profit from the banks...
Nadeem KSA replied on Tuesday, February 3, 2009 09:03 AM 

This is an intresting question.

can you please discuss here the best options for investment banks etc other than property and the profit margin....? will appreciate. Thanks in-advancs.
Waqar Latif replied on Tuesday, February 3, 2009 09:12 AM 

well nadeem, you can get around 14% profit from any bank within pakistan.

btw national saving pakistan gives around % profit, for more information you can go to this website

www.savings.gov.pk
Waqar Latif replied on Tuesday, February 3, 2009 09:29 AM 

i guess mybank & UBL are giving 18+% profit
Habib replied on Tuesday, February 3, 2009 09:35 AM 

yes It is right Banks and national savings are giving much more return than realestate, upto certain limit realestate is also subject to devaluation if pak rupee devales.
But we should keep in mind that in unfortunate severe inflation realesatte investment can save you from compleletly losing savings. I hope it will never happen in Pakistan but at least 20+ countries in recent history have faced rates of inflation 100+ percent/year. If that happens then you will end up losing all your savings. So in current circumsatnces one should not invest 25 to 30% in realesate and about same in NSS or stable/ islamic banks. An rest of money should be kept in foreign currency.
This is for the people who have surplus money or savings and cant do any busniess with it.
Waqar Latif replied on Tuesday, February 3, 2009 09:45 AM 

yes the habib rightly pointed about islamic banking since you can't loss money in that incoume is less but good enough to survive..(PS: National Saving is not Islamic Banking)
Rehmat Ali replied on Tuesday, February 3, 2009 10:51 AM 

Dears:

I purchased DHA 7 file in 2004. It cost me 28,50,000 at that time. I paid development charges of 6,00,000. Now the price in DHA 7 is 24~30,00,000. How can you say that investment in property after 5 years is good.

And properties going down now also.

Regards.
salman replied on Tuesday, February 3, 2009 11:01 AM 

if rupee devalue than property devalue autometically..for example one purchased a DHA plot in 60 lac of he sold it one year befoer he may got one lac US Dollar in return,..... but on the other hand ..after one year the price of plot is still60 lac he can get only 75 thousand US Dollar only..so he lose twice 1.can not get perofit of holding and secondly lose of devaluation of rupee..
Property more rewarding replied on Tuesday, February 3, 2009 11:04 AM 

Rehmat Ali sahib I bought a DHA phase 6 allocation file in Nov 2003 at 15 lacs. I paid 4.5 lacs for development charges for my DHA phase 6 plot. After all major corrections in property market my plot in DHA phase 6 H block is still valued at 57 lacs.

Can any bank match this return ?
salman replied on Tuesday, February 3, 2009 11:15 AM 

I can goive you example one person purchase prize bond of 40 thousand and winn 2.5 crore rupees but at the same time hundred of thousand purchased same prize bond but not winn any prize...less or more same case above if some invest in DHA 6 may get profit but thousand others lost in hundreds others scheem and even in DHA,s other sectors
salman replied on Tuesday, February 3, 2009 11:21 AM 

on fix deposit of four,one can doubled the investment
Habib replied on Tuesday, February 3, 2009 11:31 AM 

Dear Sir, "property more rewarding, thanks for sharing with us 2003 price. It was per boom price so in real sense I think your Plot price had right or even more than realistic gain like for 15 lac land you should get 15+20 and for Development 4.5 you should get 9 Lac, total 44 lac so still it is about 12 lac overvalued, the correct worth turns out to be about 45 lac, I think if you take average Plot of phase 6 it is about 48,49 Lac ranging from 36 to 70. in other words it looks DHA still bit expensive than it should be.
Waqar Latif replied on Tuesday, February 3, 2009 11:48 AM 

Habib

but at that time profit which banks were giving were only 7%, so if you have invested 1 million let suppose in the bank at that time, then only profit you could get would be 70,000 per annum.. - 10% tax, and after 5 yrs it would be only 1,350,000, which becomes 1.5 million = 2,050,000 only.. so how you are comparing it with property?

Salman

it is not the case.. in 2003, i was getting DHA Phase 1 plot for only 6 million, now can you tell me what are the prices in DHA Phase 1 at that moment?

Also in wapda 1K plot was for 13, what are current prices of 1K in initial blocks like A,B,C,D .... ?

my one colleage built his house 7.5m house for 23 lac (inc plot) in 2001, at the moment he is getting 8 million blindly...
Waqar Latif replied on Tuesday, February 3, 2009 11:51 AM 

waisay seriously i think, profit or loss only depend upon luck... i remember in 2007 we were selling our house for only 10 million, everything was done.. & something happen the deal got cancel.. & guess what we get 10s of customers who were even giving 13 million after that, but our demand goes to 15 million.. because of rates also goes up in surroundings ..
Asif A. K. replied on Tuesday, February 3, 2009 12:01 PM 

It is correct that Curently simply buying a land is not good investment. However, if yo have alredy land then construction on it will be bear fruits.
In international era, real estate mini-boom comes back only in 10 years due to economic cycle, while big boom re-appears only in 20 to 25 years. So looing at current econmic crunch world over and in Pakistan, it is safe to say that mini boom in Pakistan is still 2 to 3 years away, while big boom shal appear in 10 years time at least.

Hence, investments in Banking sector is really good option. It will save your money from de-valuation at least.
My interest is not creat panic here, but to give honest and real picture of the market.
atiq raja. replied on Tuesday, February 3, 2009 01:26 PM 

mr salam i am giving you tip for double your investment with in 2 year,just purchase any size of plot in d/12 islamabad.
test replied on Tuesday, February 3, 2009 05:38 PM 

Raja sb, please dont give wrong advises to viewers, prices in D-12 is already increased too much and in two years time can be increased max. 25% more, as u know price of one kanal plot in E-11 SECTOR is 1.5 cr to 1.80 cr. in F-11 2.25 and in D-12 1.5 cr which is already over priced.Please dont talk like double shah. I think best sector for investment is E-11 sector where u r already constructing a house.
Khayyam replied on Tuesday, February 3, 2009 06:05 PM 

Dear test,

In sector D-12 I think you can still buy a one kanal for around caror. I agree with Mr Atiq Raja that if you can buy it for that price, it is possible that the value could go up and become comparable to prices in sector F-11 in two years. That depends on key assumption that CDA finishes the development work which they are claiming to finish by June 30. Additionally your biggest risk is further devaluation of rupee any investor needs to account for.

My advice is that if someone really wants to invest in realestate, BT phase 8 is a better option for the long term. If C ring road project does complete and exceptional access to BT is provided linking BT with airport and Islamabad, the prices there might catch up to slamabad CDA prices. However that can take 8-10 years.

However don't take my words, do your own homework
ShoaibM replied on Wednesday, February 4, 2009 08:59 AM 

better to invest in G-14/1,2,3. Investment will definitely be double in 2 yrs.
ShoaibM replied on Wednesday, February 4, 2009 09:03 AM 

I invested in G/15 1.5 years ago and now the rates are approx. double, So, G-14/1,2,3 would be the ideal place to invest. Soon the development work will be starting coz almost all plots belongs to Govt. Employees and most of them are retired and in hurry to start constructing their houses.
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