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Post # 47876 - Ruppee devaluation and Investing in Pakistan,

(58649)
   Investor
Tuesday, June 1, 2010 11:36 AM 
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Brothers,

I am really confused (after response on Post 47876). Everyone is telling me to stay away from investing in the real estate market in Pakistan. If so, how come all of you visit this web site and talk about investments?
Rao Rabi replied on Tuesday, June 1, 2010 12:26 PM 

Hi Sir,

My name is Rabi frm Islamabad . i am working in a property office.I was also reading all comments of yuor freinds or anyone who they are . i was also shoked that how could they say that this is not right time for investments. This is right that i have no much knowledeg about property or investments but in my office or in all offices of islamabad we have no time for rest and people are investing in Crores or billions. So, what do you think are they all fools who are investing in propertes. It is my opinion what do you think ????????????????????????
PP replied on Tuesday, June 1, 2010 02:43 PM 

Mr. Rabi
Mr. Investor talking about hard earned money not like the people like Mohesh Khan....
Aamir replied on Tuesday, June 1, 2010 02:46 PM 

Property is at its lowest ebb and its right time for mid term( 2years) investment. At least true for Islamabad
Raza R replied on Tuesday, June 1, 2010 02:49 PM 

I know those who are investing they have no other choice to invest. Those people who are living in Pakistan they will earn money and they have to invest their money in Pakistan. For them there is no other way/source to invest. Pakistan stock market sucks the hard earned money due to some corrupt people and the govt laws in the favor of "Big investors". Some people don't like to take interest on their money so they are not investing their money in saving schemes and banks. In Pakistan there is very difficult to invest money in some running business and earn money. So, for them there is no other way only to invest in property market.
Raza R replied on Tuesday, June 1, 2010 02:49 PM 

The people who are living out side if they keep their money in foreign banks (with out intrest) they will make more money by devaluing Pakistani currency.
These Land Brokers or real state guys are doing good job. But it is for local residence.
If you see the doller rate before five years and compare it with today you will know the difference.
Five years before the doller was $1= 55PRs and now it is almost $1=85PRs. The land price was in 2004-6 (it is not exact but very near) in DHA-4 for one Kinal was 70,00000 and now it is still same
Raza R replied on Tuesday, June 1, 2010 02:51 PM 

So my point is if you are outside of country don’t invest your hard earned money in Pakistan in any kind of business right now.
Pakistan is not a stable country right now. It is still in the state of war and it will be worse in coming days.
Raza replied on Tuesday, June 1, 2010 02:59 PM 

I am a Proud Pakistani. I feel a deep regret when I see my country situation.
God Bless my Pakistan. And save it from corrupt leaders and CIA, RAW, Musad.
Pakistan Zindaabad.
Chaudhry Mateen replied on Tuesday, June 1, 2010 04:29 PM 

I am a common person and earn Halal income Alhamdolillah. I truly believe that this is the perfect time to make an investment. The ruppee has been devalued and in my opinion will not loose much from this point on. The property is in slums for 5 years now and has reached the bottom. In my opinion, whoever invest now, will see very healthy gains in the next 2-3 years.

Just my opinion. Please do your own research before buying.
MM replied on Tuesday, June 1, 2010 05:55 PM 

IMO: The rupee will go down to at least Rs.100/1.00US$.
I recently visited Pakistan after almost a year and noticed the comodity prices have gone almost double.
So the dollar requires the same jump.
Oil in Pakistan was around 60-65/litre when dollar was around 55.
Gov. is in trouble as the dollar is around above 85 but the oil price is less than 70.
Hence people do require at least 30% increase in their pay.
Regards,
MAS replied on Tuesday, June 1, 2010 06:57 PM 

No one can predict the future of various investment options. Just six months ago Euro was Rs 125/- today it is Rs 104/- Could anyone predict that six months ago? I am not talking about common people I am saying could the State Bank of Pakistan or the Central Reserve Bank of USA predict that? If yes then why did they not dump all their Euros six months ago?

One year ago OGDC stock was trading at around Rs 70/- today it traded at Rs 134/- Dollar gained only 3 or 4% (over rupee) in the last one year. Security situation in Pakistan was just as terrible a year ago as it is today but OGDC shares gained 91% during this period. Could anyone predict that one year ago? Why did large financial institutions (as well as you and me) not sell all their real estate and simply buy OGDC stocks a year ago?
MAS replied on Tuesday, June 1, 2010 06:58 PM 

I can give countless other examples. This is why financial planners emphasize on diversifying your investments. Islamic Banks have been consistently giving 10% to 12% profit (on 5-7 year term deposits) for the last several years which is certainly more than depreciation of rupee against the dollar. Brother MM, EVEN IF rupee goes to 100 for a dollar in the next two years it is still only 8% gain in value of dollar per year. So keeping all the money in dollars does not seem to be the best option as Raza R has suggested. However even 12% from Islamic banks is not enough to off-set the rate of inflation. THAT IS WHY it makes sense to have real-estate in your investment portfolio because over the long run (10 years or more) it has no choice but to catch up with inflation (as long as you do not invest in dead or fraud societies).

I am not pessimistic about Pakistan’s economic future either. I see that Iraq is much more stable today than a few years back meaning that terrorism can definitely be defeated. I see that Thar coal will give us great dividends in the future. I see that Pakistan’s high birth rate will keep demand up for real estate in the future as well as create opportunities for new businesses. Brother Investor I am definitely not saying one should invest only in real estate but some part of your savings should be in well researched quality real estate. It should be for the long term without any short term expectations.
Raza R replied on Tuesday, June 1, 2010 09:09 PM 

Dear Mr. MAS, my suggestion, to keep money in foreign bank, is for those guys who want to bring their hard earned money to Pakistan for property purpose unless and until they did not decide to shift Pakistan permanently.
What happened in Nawaz Sahif first period of rule, he froze all foreign accounts, and may be you have any idea how much people suffer? And return their money in rupees less transfer able rates then market.
Enen that time was much batter then this time. Now Govt has no money and I think any time is it can think to cease the accounts like saving depost defence certificate etc.
Investor replied on Tuesday, June 1, 2010 09:43 PM 

Well said Mas bhai. You have very rational reasoning behind your views. I am glad that all brothers gave my honest and sincere advices giving me chance to review it from different point of views.

My friend bought one kanal in E-11 when ruppee was at 55 about 4-5 years ago. He paid $110K in US dollars. Today his plot is worth around $200K US dollars despite ruppee devaluation - just another example for you all to consider.

I am definitely in for long haul in Islamabad real estate. I will take my chances in building a house and hope and pray that Allah helps us all. Also from what I read in other posts D-12 sector has a bright future.

THANKS ALL!!!!
sattar replied on Wednesday, June 2, 2010 12:02 AM 

i am looking to invest in sector d-12, e-11, e-16, e-17, d-17 and g-15 and bahria phase 2, 4, for the next 5 years. these are ideal places in pakistan.
Ehtesham ulhaq replied on Wednesday, June 2, 2010 03:20 AM 

I am an expatriate living outside Pakistan. I agree everything what is discussed above but my own thinking is little differently. Why should I keep my money abroad in an interest free account? I am talking about those people who do not take Riba(Interest). Riba is haraam even abroad or inland but if one opt not to take Riba from Bank will the bank put his deposit in some Riba free mode. No the bank will use the money in the same system and it will generate Riba even we take it or not, then who benefit? the foreign banks so if we take our part of it and give it to the needy (as the levels of haram/Halal different according to time and need) it should be alright, but still the foreign banks will earn out of our money so why not our Pakistani banks take the benefit instead of a foreign bank in this case even we take the profit or not all the benefits goes and remain in the economy of Pakistan. Foreign currency will not loose its worth according tothe above arguments and can be used anywhere when needed.
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