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Future of Real Estate in Pakistan,

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   MAXON - Home & Property Solutions
Wednesday, January 13, 2010 05:51 AM 
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Dear Mates,

Let us talk about the 'Future of Real Estate' in Pakistan in this forum. It is suggested that the debate should be unbiased and everyone should accept the standpoint of the other, open heartedly.

I have already emailed to Hamid Meer to telecase a program in Capitaltalk. Let us see that by when the world will be able to watch this session with Hamid Mir.
Ahmad Raza replied on Wednesday, January 13, 2010 12:40 PM 

Dear Sir,

A lot can be and have been said on this topic but i believe the truth is that the real estate buisness in pakistan has huge potential for future.

Various sources have revealed (mostly media and housing ministry) that there there is a shortage of 6-7 Million house at the moment and the demand and supply gap is increasing everyday. The two main hindrances at this time are (i) law and order situation of the country and (ii)economic crisis .i.e. inflation or reduced buying power of our countrymen.

Keeping all this in view, i believe that once the economy+law and order situation improves we will again see a lot of progress/activity. It does not mean that the prices will be skyrocketing like before but an overall reasonable gain will be visible. Its gonna take some time before the investors gain some confidence and come back to invest in real estate sector.
Wellwisher replied on Wednesday, January 13, 2010 03:18 PM 

Facing problem in posting reply
Azad K replied on Wednesday, January 13, 2010 04:23 PM 

Future of real estate in Pakistan? Depends on how far into the future you want to look. Over the longer-term the outlook is good and the fundamentals are good for the sector. Population is rising, there is a growing middle class, Pakistan has immense potential so the housing sector should do well. In short-term I don't think it will do as well. The economy has not grown so strongly in the last few years. The population is struggling with the increase in prices of many items which means they have less disposable income available. Then many new housing schemes have been launched and most of them are still unoccupied to a great extent. Every middle class family has more than one plot already to build a home. Speculators have largely disappeared from the market. There is excess of supply over demand and I cannot see the picture changing in the next few years. Prices generally are going down towards their correct level rather than the inflated bubble prices of a few years ago. Only about 25% of the Pakistani population can actually even afford to buy a plot. So my view of the market is not positive for the next few years. After a few years the market should start to recover again.
Ahmad Raza replied on Wednesday, January 13, 2010 05:21 PM 

Dear Azad K Sb,

No offence but where did you get this figure of 25%???. Its kinda hard to believe that 25% of Pakistani people can buy a plot in housing societies n big cities(since we normally discuss about poperty in big cities).
Azad K replied on Wednesday, January 13, 2010 05:41 PM 

I read about 25% from some research paper by some scholar on the internet. Don't have the details from the top of mu head. Say it costs 1 million to buy a 10 marla plot in an average modern housing scheme, 75% of the general public will not be able to buy that I guess. This is not surprising when you consider that 30-40% of the population are living below the poverty line or around 60 million people.
atiq raja. replied on Wednesday, January 13, 2010 06:20 PM 

very simple,at present there is no future,because shortage of basic things which appreciate living in country like light, water and natural gas and also devaluation of rupee, the situation going towards countries like Somalia and Nigeria.
Ahmad Raza replied on Wednesday, January 13, 2010 07:33 PM 

Atiq Raja Sb,

I agree and donot agree with your comments at the same time.

I agree that light, water and natural gas are problems alongwith devaluation of rupee but we are not the only ones in this world therefor i believe it is unfair to compare our country with somalia and Nigeria. The basic difference between them and us is the industrial infrasturcture. We just need an average(not even a genius) leader to move a long way ahead. Yes there are problems, but who doesnnot have problems???

Look how much and how fast we developed in early days of Musharraf and Shaukat Aziz. They only lost the game when politicians around them treated them like gods and they actually started thinking the same way. We, as a nation, have proved in last 10 years that if provided the right conditions(not ideal) we can develop very quickly. This PPP is killing us at the moment.

Talking of problems, just for information to all, power crisis is not going to be gone in next 1 to 2 years minimum, after which situation will start improving. Wapda can do better than this but they dont have money to pay for oil to PSO and independent power plants (IPPs). I am saying all this with authority bcoz i belong to power sector. Next government can improve the situation very fast if they are able to stablise the economy of the country.

I am not very hopeful about gas too (no new gas fields being discovered in pak and iranian gas not likely due to political and security problems with US and in Balochistan)but there are many countries who dont have natural gas and use LPG which should be ok.

I think this is enough for now...this is turning into a lecture but i must say....."Mayoosi Gunah Hai".
qamar replied on Wednesday, January 13, 2010 08:56 PM 

Atiq raja is saying " don't invest or even think about DHA and Bahria" no future and i absolutely agreed
Azad K replied on Wednesday, January 13, 2010 11:41 PM 

Sorry to hear that you lost your aunty. I guess it depends on the type of person that you are, some of us worry and some of try to use logic as much as we can and to leave the emotions to side.

Personally I look at things differently. I try to look at the probability of being killed in a country of 180 million due to a bomb blast and I think that the chances are pretty slim. I think you have more chance of dying from a heart attack than from a bomb blast. But as the word terrorism suggests the aim of the bomb blast is to kill some people but a wider aim to terrorise the people.

Every country has moments when it goes through a civil war like situation and even terrorism. It happened in the U.S and U.K and they lost more people than we did, but they did not lose their resolve or wanted to live in some a different country that was an easy way out. I have confidence that the situation will improve within the next few years. Not everyone has imagination some need to see things to believe and some believe in things and thereafter create them.
Ali S. replied on Thursday, January 14, 2010 05:23 AM 

one of the things to note is that for the last few years short term interest rate was at 16% or so which crippled the purchasing power of flipping investors along with tighter credit.

with inflation getting under control and interest rates dropping...I forsee better situation on this front. this should help realestate prices in the near-term.
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