Globally, the real estate market cycle follows a predictable curve. Investors anticipate this cycle every five years or so to potentially secure larger gains. In Pakistan, this pattern helps cool off property rates from the previous peak, opening the door for new investors enticed by the latest drop in property values.
Our market sources have confirmed that real estate prices are currently at their lowest point, whether for constructed properties or plots. The situation has been so dire that some asset holders who face difficulties holding their assets are even willing to sell at rates lower than the already low market prices. Opportunistic investors are always on the lookout for such deals, but now you can avoid this situation if you act wisely.
Let’s delve into the reasons signaling the impending resurgence of the real estate market that will catch everyone’s attention soon:
End to the Political Chaos
In a global investment landscape where stability is paramount, it’s unlikely that the ongoing political uncertainty will persist for much longer. Economic considerations, more than anything else, demand an end to this chaos. Whether through transparent means or not, an election can likely resolve much of the turmoil.
Crackdown on Dollar Hoarding
Recent efforts to curb dollar hoarding have had a significant impact. Law enforcement and taxation authorities have taken measures to monitor and limit dollar trading, especially in the black market. This has resulted in a drop in the dollar rate against the Pakistani rupee. Investors are already turning away from investing in dollars, and this shift will likely redirect investment towards real estate.
Gold Market Regulation
Similar to the dollar, gold trading is also being subjected to regulation. The government aims to record and register gold investments to generate revenue and prevent the hoarding of black money in gold. The volatility in gold prices, influenced by fluctuating dollar rates, is making investors wary of investing in gold.
Stock Market Volatility
The stock market in Pakistan has been particularly sensitive to political factors. While there might be better days ahead after the announcement and conduct of elections, the unpredictable nature of politics in Pakistan casts a shadow over stock investments.
Now, let’s return to what’s happening in the real estate market of Pakistan as of September 2023.
The Market Experts’ Take
Experienced real estate investors recognized the upcoming market movement ahead of others. Projects and properties that remained subdued during the recent recession period, causing significant value loss, are now gaining traction. Plots, plot files, under-construction developments, and commercial ventures are witnessing a consistent rise in demand, leading to gradual increases in asking prices while still offering reasonable deals.
New Buyers are Emerging
Lower property rates have attracted new buyers who were previously priced out during the last upswing. To adapt to changing investment dynamics, real estate developers have reduced their inventory prices by introducing more affordable options. It’s important to acknowledge their efforts, especially considering the rising costs of construction materials that also impacted end-users.
Shift in Investment Preferences
Investors, primarily driven by the pursuit of gains, prefer short-term investments due to their aversion to locking their money in long-term projects. Currently, viable short-term options are scarce and come with their share of risks. Therefore, there’s a growing demand for vertical developments that promise guaranteed rental yields. This means investors can potentially earn up to 15% rental yield on their apartments or commercial outlets in under-construction projects, along with up to 50% capital gains in the medium term. This trend is drawing investors towards this sector.
The Closing Word
It won’t be long before projects experiencing increased demand witness a substantial rise in rates. Don’t miss out on this current investment upswing; we’ve already waited long enough. It’s time for swift action. To make your investment journey smoother, we’ve attached an inquiry form here. Fill out the form to get information on projects that align with your budget and aspirations for medium-term returns. You can also reach out to us by clicking the WhatsApp Icon on the page. Let’s get to work now!