House value depreciation (passage of time) vs increasing construction cost

Posted In CategoryProperty Updates
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    Asghar 1 year ago

    I am an expat and thinking to build a house to rent out for few years and then sell it and built a house for my personal residence, i am curious to know that how much ratio of house value decreases (with the passage of time) vs increasing construction cost. For example, if i construct a house in 10 million in a devolved sector in Islamabad, after 5 years what would be the cost to build the same house vs how much will this house be devalued as it wouldn't be new house. I am doing some math to make my mind to construct or not.

  • Shuja 1 year ago

    hi Asghar,

    I don't know much about calculations but the only thing i can ensure you that real estate business dynamics change drastically from past couple of years we witness a positive trend in property business and so what i believe is from whatever the percentage your property depreciate its still profitable to invest in real estate. my honest advice is to contruct it anyway.

  • 1 year ago

    Asghar, only 10% depreciation will be charged per year and on reducing-balance method.

  • 1 year ago

     

    in my opinion, a well maintained residential house in Islamabad takes 40-50 years to depreciate fully in value. it such along time so the only thing you should considered well is the construction cost as it increases day by day. man you already wasted 3 months thinking about it.

  • 1 year ago

    fully agreed with Irfan. asghar buying a plot/ house in a excellent location always pay back more than any depreciation value.

  • Malik 1 year ago

    according to me depreciation is a good thing as the value of deducted from taxable income every year so the tax burden reduces to a significant amount.

  • Syed 1 year ago

    If you buy a new house and maintain it reasonably, there should be no concern of depreciation for 5-6 years at all, as it will be easily offset by rising construction costs. so depreciation is nothing to think about it Asghar.

  • Syed 1 year ago

    Now coming to structure. If you ask any structural engineer, current Islamabad houses are having overuse of steel. I haven't seen any houses without proper concrete columns and good steel in roof. I have seen specially in 500 sq yard houses. It's a great risk to save money on steel for such an expensive property. If builder's house develop structural cracks, all his investment will go down the drain. Builders are really afraid of such situation. 

  • Syed 1 year ago

    Many houses are lacking in Waste arrangements as the biggest of all problem is plumbing and rain water drainage etc. as plumbing plays a vital role in a buildings life. in islamabad the main concern is to protect your house from water damage as its a well knowed rainy area. so keep this point in mind before going to construction and pay good attention to it my friend.

  • 1 year ago

    can anyone tell me how much would be the life of newly constructed houses in islamabad after which they drop down to plot value or are considered just livable?

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