Pakistan property market is stagnant since the introduction of higher taxes in budget 2016-17. The property tax amnesty scheme has failed to up lift the stagnant property market. Panama case decision followed by crack down by SC on black money has proved last nail in the coffin. Let’s see why Pakistan property market is cooling down.
Real estate agents were expecting relief in property taxes but budget 2017-18 has failed to provide any relief. The higher property taxes have made the property transactions costly due to which volume of property sale and purchase has decreased. Higher taxes are one of the major reasons of property market stagnation.
Crack down on black money
Mega corruption cases are under investigation by SC. People with black money are afraid to invest in reality sector. Unfortunately Pakistan property market is alcoholic of black money. High end luxury properties are used to whiten the black money. Blockade of black money is one of the major reasons of cooling property market in Pakistan.
Low foreign investment
Most Pakistani expatriates live in Middle Eastern Countries and send huge remittances. Most of this money is parked in real estate sector. But now remittances are decreasing due to the melt down of Middle Eastern Economies. Low investment in real estate sector by Pakistani expatriates is another reason of cooling property market.
Declining economy and Political turmoil
Pakistani export is low but import is high. Due to which debt is rising and our Rupee is falling as compared to the other currencies. This clearly shows that Pakistani economy is falling apart. Similarly Pakistan is once again facing the political instability. Declining economy & political turmoil have negative impact on property sector as market never likes uncertainty.
Pakistan real estate market situation
At the moment we can see falling property prices. Asking price has decreased by 20%. Volumes of real estate transactions have also decreased. There are only sellers but it’s very hard to find the buyers. This is just the start and can be termed as tip of the iceberg. The real storm will occur soon. After the storm we will see 35-50% price crash followed by long stagnation.