I hope you all are good and doing great in life, Real estate in jeopardy, from past 2 years, many suffer losses at this critical time, even many realtors didn’t see that coming. But at the beginning of 2018 real estate activities are started, many properties are sold and purchased. First we need to learn how this circle works, real estate buying selling need huge sum of money, whenever economy is on the rise, and business is good, there comes 3 options, stock market, gold and real estate. Gold in last few years didn’t perform very well, so many opted out of this options, which leaves it to two competitors, stock market and real estate. Due to huge uncertainty in stocks. real estate in the premier option. Although Real estate also didn’t perform well in the past few years as our system didn’t generated enough amount to be injected in real estate. Still I am very optimistic that real estate sector will started to thrive in coming few months.
Pakistan is facing a serious shortage in housing sectors, which expected to reach 20 million by 2025, while official estimates the current shortage at 10 million units, which increases every year, funds required to finance the gap are a enormous $180 billion – almost half the size of Pakistan’s economy.
In coming days, low cost housing schemes are gonna be a hit. In last 2 years many realtors started their own housing schemes which became an ultimate success. One of the shinning name was AL-Kabir Town Lahore, near to Bahria town Lahore. The main reason of it’s popularity is 3 marla plot low cost plots with easy installment plan. Even many customers bought plots in bulk for rental income in future in these low cost schemes.
Why Real Estate?
DHA & Bahria town are considerably the biggest developers in Pakistan real estate market, these two housing schemes, attract billions of dollars from local and overseas customers, but there are also other players those are not discussed widely, one is agriculture or raw land and second one is downtown areas of the cities as mostly DHA and Bahria town are mostly considered as Sub-Urban areas.
When developers buy raw land for development of housing schemes, the transactions cycle triggered, as the money flow started. The value addition to the land and easy installment plan attracts lot of customers. Take an example of Bahria town Karachi. It was barren land before and now it is turned into most valuable land
Migration from other cities is happening at the fast pace, many families are relocating to metropolitan cities due to lack of infrastructure, facilities and opportunities in small towns.
Re location from with in the city is also happening at great numbers due to numerous reason like downfall of a joint family system, rushy areas, long traffic jams.
Opt out for the opportunities in newly developed areas, because it’s safe to invest in sub urban areas of the city. Look out especially for the under valued opportunities as it has better ROI.
What’s up for investment?
Try to buy small plots, worth less than 50 lacs especially. As contrast to DHA prices in bahria town are quite less. At the moment Bahria Orchard phase 4, Phase 2 are the best for investment as rates are expected to rise in coming next months. Huge amount of money is expected to be injected in system as many large investors took the benefits of scheme and the sum is expected to a part of investments in real estate sectors. Currently rates in Phase 4 for 10 Marla plots are ranging from 45 lacs to 55 lacs approximately, 5 marla plots in phase 2 are ranging from 2.6 million to 3.6 million and 08 marla plots ranging from 3.5 to 5 million.
In Bahria town Lahore 10 marla plot is ranging from 4.5 to 7.5 million are the best for investment and construction purpose, currently ring road development has been stopped, but as soon as the development starts rates will appreciate dramatically. Even in past 6 six years 05 marla plots records a good appreciation in Bahria town Lahore.
Secondly, In Karachi go for Bahria town Karachi, 125 sq yards plots are foremost to invest as rates are currently ranging from 2 to 5 million, In my opinion precinct 12,14 15 27 and 28 are the hotcakes for investments. Consider this as short to medium term long investment and expected a return of 50% – 100%.
Secondly look out for the opportunities like apartments and villas who are ready to completed especially in next 6 months to 12 months, as soon as the possession are handed over rates will be appreciated as many buyers are waiting to move in Bahria town Karachi.
Factor Affecting Real Estate
I believe probability of loosing money in real estate is equal to none, but still many investors suffer heavy losses. This is manly happened due to Irrational decision making. Irrational decisions are mostly taken due to lack of information. The decisions are mainly based on instincts.
When realtor make decisions for investment in real estate, always keep external factors.
- Supply and Demand
- Increasing affordability of consumers.
- Economic growth.
- Increasing population
- Consumer’s confidence
- Laws and regulation
- Location, Location and Location
- Developers Credibility
- Land Accusations
If you want to consult and need advise about investment opportunities, Feel free to call for more assistance.