Real estate: Market to remain stagnant with flow of investment to Dubai
Experts predict 2015 to be a correction phase for all major real estate markets.
Outflow of investments from Pakistan will continue in 2015 as well and is likely to increase because of a lack of security and political uncertainty in the country. DESIGN: ESSA MALIK
LAHORE:
With experts predicting that this year will be a correction phase for almost all major real estate markets of the country, the sector is unlikely to post huge gains after remaining stagnant throughout 2014.
Investment flow from Pakistan to Dubai is also likely to continue as Pakistani investors in the previous year stood second by injecting $2.06 billion into the UAE market with the maturity of 5,079 property transactions, according to Bayut.com, a leading portal of the United Arab Emirates (UAE).
Outflow of investments from Pakistan will continue in 2015 as well and is likely to increase because of a lack of security and political uncertainty in the country.
According to a Zameen.com survey, 17% Pakistani investors wanted to invest in overseas property, out of which 49% wanted to buy property in UAE.
“This trend is due to an insecure environment in Pakistan, Dubai is a sort of second home for many influential Pakistanis and this is the main reason for the outflow of investment,” said Nasir Jamal, General Secretary of Defence and Clifton Association of Real Estate Agents, while talking to The Express Tribune.
Many experts also believe that a major part of the real estate investment outflow is black money. In Karachi, where law and order situation is much worse, people avoid keeping their money in banks and invest either in stocks or the real estate market.
Both markets are at their peak currently and might see a correction in coming months. Experts said that for influential investors UAE is the immediate market for investment after Pakistan due to firm real estate laws and investment security.
Local market
The predictions for the real estate markets of three major cities of Pakistan are mixed, however, no one is claiming 2015 to be an outstanding year for property.
“Property prices in Karachi are at their peak and we are expecting these to decline between 15-20% in 2015,” Jamal said. Though he said that buildup property will strengthen this year as this sector may attract genuine buyers and the city is already short of 1.3 million units.
Zameen.com Chief Executive Officer Zeeshan Ali Khan is hoping to see some gains in property markets for the current year. “This year is going to be a better year in terms of activity in the property market of Pakistan, especially if the political climate – which has cooled down lately – continues to remain calm,” Khan said.
For Khan, property markets are not likely to see increments of more than 5-8% during the first and second quarter of 2015. Popular new housing projects in the primary market however could see rises of 10-15%.
A lot of new projects like LDA City Lahore, Bahria Town Karachi, DHA City Lahore, DHA Gujranwala and Multan etc are likely to draw investors’ attention in 2015.
Zameen.com’s market sentiment survey, for the first half of 2015, shows that 39% people are expecting property prices to rise by only 5-10% in the next six months.
However, a favourable budget will also greatly help in boosting the market towards the latter half of the year and stir some activity, Khan added.
Published in The Express Tribune, January 31st, 2015.
With experts predicting that this year will be a correction phase for almost all major real estate markets of the country, the sector is unlikely to post huge gains after remaining stagnant throughout 2014.
Investment flow from Pakistan to Dubai is also likely to continue as Pakistani investors in the previous year stood second by injecting $2.06 billion into the UAE market with the maturity of 5,079 property transactions, according to Bayut.com, a leading portal of the United Arab Emirates (UAE).
Outflow of investments from Pakistan will continue in 2015 as well and is likely to increase because of a lack of security and political uncertainty in the country.
According to a Zameen.com survey, 17% Pakistani investors wanted to invest in overseas property, out of which 49% wanted to buy property in UAE.
“This trend is due to an insecure environment in Pakistan, Dubai is a sort of second home for many influential Pakistanis and this is the main reason for the outflow of investment,” said Nasir Jamal, General Secretary of Defence and Clifton Association of Real Estate Agents, while talking to The Express Tribune.
Many experts also believe that a major part of the real estate investment outflow is black money. In Karachi, where law and order situation is much worse, people avoid keeping their money in banks and invest either in stocks or the real estate market.
Both markets are at their peak currently and might see a correction in coming months. Experts said that for influential investors UAE is the immediate market for investment after Pakistan due to firm real estate laws and investment security.
Local market
The predictions for the real estate markets of three major cities of Pakistan are mixed, however, no one is claiming 2015 to be an outstanding year for property.
“Property prices in Karachi are at their peak and we are expecting these to decline between 15-20% in 2015,” Jamal said. Though he said that buildup property will strengthen this year as this sector may attract genuine buyers and the city is already short of 1.3 million units.
Zameen.com Chief Executive Officer Zeeshan Ali Khan is hoping to see some gains in property markets for the current year. “This year is going to be a better year in terms of activity in the property market of Pakistan, especially if the political climate – which has cooled down lately – continues to remain calm,” Khan said.
For Khan, property markets are not likely to see increments of more than 5-8% during the first and second quarter of 2015. Popular new housing projects in the primary market however could see rises of 10-15%.
A lot of new projects like LDA City Lahore, Bahria Town Karachi, DHA City Lahore, DHA Gujranwala and Multan etc are likely to draw investors’ attention in 2015.
Zameen.com’s market sentiment survey, for the first half of 2015, shows that 39% people are expecting property prices to rise by only 5-10% in the next six months.
However, a favourable budget will also greatly help in boosting the market towards the latter half of the year and stir some activity, Khan added.
Published in The Express Tribune, January 31st, 2015.