Impact of Market Situation on Different Types of Properties
Since the last two years, the economy of Pakistan, and specifically the real estate market of the country has been facing recession-like situation.
The real-estate market has witnessed a record low trajectory of sales and investment along with a decline in property prices.
Expert advice is a much-needed thing for any potential real estate investor to tackle this grieved situation wisely.
In this important blog, a deep analysis and an insight into future market situation has been explored, read till the last line to get an expert opinion on the right time.
Impact on Residential Properties
Residential Plot File
Any residential plot file that is booked on a 2 to 3-year installment plan and would be ready in the year 2025 or 2026 is out of the danger zone.
This type of Property will mature after a 2 to 3-year time frame when this low-trend market phase passes away. So, you can get an adequate capital gain.
But, there are several prerequisites to get this capital gain.
- You must have invested with a credible property investment group.
- You must have invested in a registered, credible, and populated housing society.
Ready or Near to Possession Residential Plot
If you have bought a residential plot on cash and are ready to get possession or already have taken possession, it can have following future options.
- If you hold the plot and want to construct a house, it will be out of the danger zone.
- If you hold the plot and want to resale it in the future with a gap of 2 to 3 years, it will be out of the danger zone.
- If you hold the plot and want to resale it now I-e; in August, September, October, or any month of the Year 2023, you will be in the danger zone and may lose your due profits or even get a savage loss.
For example, if you have a residential plot in Bahria Town worth 80,00,000 /-Rupees, it will be sold out at 70,00,000 /-Rupees with a net loss of 10,00,000 /-Rupees.
Impact on Commercial Properties
The same rule is applied for commercial properties; you will be in a safe zone if you can hold the commercial property for 2 to 3 years of the plan. If you want to sell it now, you may get a profit drop or even a loss statement in hand.
The rental situation for a commercial property is different in this downward market trajectory phase.
If you have a property in a high population density area, you will be in a safe zone because you will get a decent rental income but if you have a property in an abandoned place, then you will be in a danger zone with zero rental income and potential loss in property capital gain.
What is the Way Forward?
At Property Naama Group, a team of property consultants has designed a way forward for our clients and the people of Pakistan to come out of this phase of recession and the trembling state of the economy.
Here are some suggestions to consider
Prefer Established Brands
Always invest with established and registered real estate developers and investment groups.
Avoid Interest-Based Deals
Do not invest in real estate projects that are dealing in fiscal interest-based investments.
Invest with real estate developers who have on-ground stakes in the market in the form of Commercial HiRISE projects or proven residential investments.
Choose Ready to possession
In these circumstances, prefer to invest in ready to possession plot instead of an installment file. The ready plot will be affected by 15% as compared to residential plots which will be affected at the rate of 20 % in this property recession in Pakistan.
Silver Lining
Get a fair benefit of the silver lining in this disguise. It means prefer to buy Properties, particularly in this low market time at low rates. This substantial price gap along with future annual property appreciation of 15 to 20 % will prove a great deal of profit gain for wise investors.
Go With Long Term Deals
Always prefer to invest in long-term real estate investment plans instead of short-term profit gains.Choose to invest in a property that has high clientele demand instead of a preliminary stage property with zero customer intent.
Disclaimer:
Please note that the information provided in this blog post is for educational and awareness purposes only and should not be considered as professional advice.
Property Naama Group is not responsible for any investment decisions made by our clients or investors based on the information provided.
We highly recommend that you conduct your own research and seek the advice of a professional before making any investment decisions. Investing comes with risks, and it is essential to invest on your own responsibility.