Impact of Panama case decision on Real Estate
Panama case can be termed as the defining moment in the course of making our country corruption free. The decision will surely impact the real estate sector that, for the most part, depends on black money. The huge involvement of black money has kept the real estate market inflated for several years now but, as a result of this decision from SC, the property sector is sure to see a huge drop as the investors will think twice before putting their black money into this sector anymore.
Here are a few major aftershocks that shook Pakistan real estate sector in the wake of Panama decision.
Effect On Property Prices After The Crackdown Of Black Money:
All the corruption cases and property frauds are under investigation after the opening of Panama case decision. Black money is facing a ruthless crackdown nowadays. The investigation is being opened for all the housing schemes for the unlawfully acquired land. The major question that arises here is: who will go for buying the luxury properties when black money is out?
Winners And Losers:
Winners and losers will always be there when property prices will fall. The general public and taxpayers may end up on the winning side though because they buy cheap properties at a very low rate. On the other hand, investors who have recently bought their properties will surely be the biggest losers. The volume of transactions is very low and the estate agents will face many difficulties due to a reduction in income.
There are three possible difficulties: low price fall, stagnation, and high price fall. Property prices will be high in those areas where there are more empty plots than houses and where speculation is high and vice versa. You will see a long stagnation in the areas where property prices are less than 1 crore due to high demand.
Pakistan property price crash is an important factor that should be matched with the affordability of general public. We will either see a long stagnation or a hard price crash of 35-50%. The combination of both the long stagnation and hard price crash can be possible and this combination already exists in Dubai real estate prices which are 30% below the pre-cash level of 2008.