Mansoor Sadiq

The real estate sector is going through a bad patch in the face of the current economic meltdown. One of the major reasons behind this situation is that expatriates are showing little interest in investing in the sector. Over the last few years, investments in the sector have risen manifold and housing projects have been launched even on the green fields. However, the depreciating rupee and deteriorating politico-economic situation in the country have discouraged middle class Pakistanis from investing in the housing projects.

Renowned land and property expert Faiez Seyal told WealthPK that in the last few months, there was scarcity of genuine buyers in the real estate sector. The rising cost of construction material has particularly contributed towards reducing investment in the housing sector, he added.

‘’Economic stability comes with political stability. Amidst the ongoing political and economic crisis in the country, people prefer to invest their money in dollar-based areas. The rising trend is to invest money in gold to avert any documentation of savings,’’ Seyal said.

‘’The whole world is facing economic recession and experts have predicted 2023 as the mother of all recessions,’’ Seyal said, adding that amidst rising inflation in Pakistan over the last couple of months, the majority of people were left with little income to invest in plot and housing projects except for a handful who had saved for years to buy a new home.

“Despite that the purchasing power of the people has reduced, the need for housing will continue to remain high. Amidst this predicament, the public should stay away from file and instalment projects contrary to the announcements from all leading developers in the country,” Seyal said.

“Investments have turned risky in all sectors following the uncertain economic situation in the country and now keeping money in banks is no more the right course of action. The inflation rate in the last few months has escalated from 40 to 50 percent. In the past, people used to invest in property from their savings but nowadays routine expenditures leave one with no savings to invest. As a result, there is no demand for property in the market. In the obtaining scenario, there are potential sellers but no buyers to purchase files anymore,’’ he said.

The cost of construction has risen to the extent that all those having plots can’t afford to go for construction anymore, he added. Talking to WealthPK, Chief Executive of Takmeel Properties Malik Danish Ali from Rawalpindi said the recent economic crisis has led to a complete business crash.

‘’Property being the most profitable investment area has suffered too and all the leading and the most successful housing projects in the twin cities like Bahria Town, Top City 1, Faisal Town, and Park View City have seen a lower market value in resale. The prices of plots have been almost 20-30 percent down in the last few months.

The price of a one Kanal plot in Bahria Town, Top City 1, and Faisal Town is down by almost Rs5 million, while the price of a five Marla plot is down by 1-1.5 million, of 7 Marla by 1.5-2 million, and of 10 Marla by 2-2.5 million rupees,” said Malik Danish. He said a commercial plot in Lahore Smart City that was worth Rs80,000,00 a few months ago was now available at Rs30,000,00. Most investors believe it is not the right time to invest in property, he added.

Credit: Independent News Pakistan-WealthPk