Reasons of Pakistan Real Estate Market Crash 2018-19
Real estate market is always the first choice to invest money whether it is legal or illegal. It is also a considerable heaven to park black money. From last few decades, it is an efficient trend to invest in the property market but a misfortune is that it provides a silver chance for those who want to transform the black money in legal terms. New real estate laws have increased the taxes on property transactions, black money flow into reality sector was blocked and property rates were revised. In this article we mentioned the reasons of current property crash in real Pakistan.
1-Scams of Illegal Housing Schemes
Due to current property scams a large number of families have lost their savings of whole life. According to the NAB 6000, housing schemes are unlawful in Pakistan. The crackdown of NAB against illegal housing schemes is the biggest reason of Pakistan real estate crash.
But things have changed as the new government has started to demolish the illegal constructions. At the same time, many housing schemes have been sealed by NAB in the meantime.
The ultimate reason for property burst is that people are afraid to buy the properties in housing schemes. It will take time to achieve the people’s trust back.
2-Non-Filer property buying constraints
The government has maintained the property constraints about property buying for non-filers in Mini Budget 2018-19. as its very hard to find the filer buyers, this has broken the richness property market. It is also announced that Overseas Pakistanis have to produce a certificate from the banks to prove that money was sent from abroad just 60 days prior to property registration. These 2 laws have decreased the investment in the real estate sector and prices are falling nationwide.
3-Naya Pakistan Housing Scheme
Housing trouble is one of the foremost crises of Pakistan. We need 12 million new homes to solve this problem. 200,000 housing units are in a plane to develop. The government planned to provide the 5 million houses to the people of Pakistan which are available on installments. Naya Pakistan housing scheme is providing houses in affordable houses, those who were willing to buy properties in private housing schemes are now booking affordable homes. Development of this project has reduced the figure of investment in private housing societies and real estate projects. That is why we can observe the price decline in real estate across Pakistan.
4-Crackdown on Black Money
People are acquired about the source of income who have bought properties with black money. Many politicians have been disqualified because they couldn’t show the money trail. Investment is low in real estate sector because people with black money are afraid to buy property. Zero tolerance of black money effects the estate price fall nationwide.
5-Increase in tax
Property taxes are just jumped by more than 50%. It also decreases the rate property market. The government also intended to utilize information technology to expand the narrowed tax base in months and years ahead.
Property Price Forecast
People think that such massive crash in the property market is impractical. Market prices are 38% down. But 30 to 40 percent crash is still expected. We should also know that what happened in Dubai estate market. Property prices in Dubai were AED 2200 per sq. ft in 2008 and are AED 600 per sq. ft now. Property prices in Dubai are just 25% of what they were in 2008 because of new international laws that have blocked the black money investment. We will see similar property price flow in Pakistan.