Factors That Govern the Real Estate Market
Pakistan’s real estate market has gained momentum over the past decades now. Investors see it as a great new horizon to invest and make profits, making the market more attractive to new investors both medium and long term. Investing in the real estate market is not easy. There are many factors that affect the market, and it is essential to gain knowledge before making any move to invest. To understand the fluctuation, we need to study the factors individually. Although there are many elements including, demographics, economic growth, affordability, laws and policies, and so on.
Here are a few that mainly change the game.
The first and most essential element is the location of the property. The better the place the higher the price. Therefore, the real estate in the city center is more expensive than the real estate in the surrounding area. Location controls many other factors including, commuting, and access to facilities. Proximity parks, schools, facilities and proximity to the city are all great additions; therefore control the price of the property.
If you are buying property, the location should be very considerable. In Karachi, the most notable regions are, DHA, Clifton, PECHS and SMCHS and so on. Similarly, if you are shopping in Islamabad, places like DHA, I8, Bahria etc should be considered. Lahore on the other hand is famous for Cantt, Model Town and DHA.
No matter if you are investing in a business or buying a house, location is the first consideration. Although this will cost more than the others, this is a factor that needs serious consideration before making any decision.
2. Physical state
The second in line is the state of the property. Sometimes the state of the property is zero and the only money involved is for the location and size of the plot. To invest in real estate, conditions play a vital role. If you are interested in buying a newly built house, you may have to pay more than buying an old building. It is always preferable to buy a well-maintained or new property instead of investing in a property in a poor state.
The condition of the property includes the interior and exterior. Critical and intentional inspection of the property is essential. Before concluding the deal, check for everything from murals to appliances and furniture arrangements; each plays an important role in access to the state of the property. You don’t need a house that needs a lot of repairs and maintenance if you pay a quick sum of money.
You can negotiate the price once the condition of the property is accessed. The price is negotiable if you find problems with the condition of the property. Anything damaged or broken can help you in negotiation. This negotiation will save you some money to raise the status of the purchased property.
3. Limit Appeal / Surroundings
The main element that adds value to the physical condition of the property is the quality of its surroundings. If the property is surrounded by low-valued shops like mechanics etc, the value will be low. The surroundings can be improved and this improvement will add value to the property price. The overall appearance of the property makes it more expensive.
A good car garage, a plantation outside the property, a decorative driveway and lights can multiply your profit. This is one aspect that can be worked on at any time. If your house looks good from the outside, you can always ask for more price resulting in more profit.
4. Government Laws and Policies
Policies about where you live or intend to purchase property also have a big impact on its valuation. A change in policy causes a price fluctuation. For example, the recent change in the law on share buying has caused a decline in the price of shares.
When buying any property, you need to check the policies currently in force.
5. Facilities and Installations
Ease of living in the new standard of modern society and place. And usually, all newly built properties, whether apartments, built-in communities or corporations, all compete to provide customers with everything that can be arranged.
Generators, elevators, community halls, gyms, swimming pools, parking, electricity, and water supply are all part of facilities and facilities. Most people
prefer PECHS instead of DHA only because of the constant water supply. Older communities and properties where such high-tech facilities are lacking often cost less.
Access to Public Transportation is another advantage to property taxes. Other facilities include supermarkets, hospitals, and parks, which all add value to the properties in the vicinity.
No one is willing to buy property in an area where security is an issue. Everyone expects a safer and safer environment. Location and security go together. Because security primarily depends on the location of the property.
Inbound communities and societies are a new cart. The 24/7 security of these built-in communities is a valuable addition that cannot be ignored. The addition of guards, CCTV, and a high-tech security alarm further enhances the property.
7. Demand and Supply of Property
As the world changes, so do the choice of people. The trend to buy an apartment with a picturesque view in a tall building has increased the demand for such kind of property and therefore the prices are higher.
Most people are interested in buying property in urban centers, creating a superior demand. According to the economic rules, the higher the demand the higher the price. Meanwhile, in places where property abounds available and less demand the prices are lower. On the other hand, if prices are too high, demand falls resulting in an imbalance of supply and demand.
It is imperative to study the demand and supply of real estate before buying one.
The above-mentioned factors are the basic ingredients of real estate but are not limited to these. There are many factors that govern the price of the property. It is important to study every factor before making a big decision to invest in property. This article is written to educate people about property valuation. We intend to help everyone with future property issues.
Meanwhile, if you want to read more such exciting lifestyle guides and informative property updates, stay tuned to Feeta Blog — Pakistan’s best real estate blog.
Govt urged to introduce soft taxation regime for real estate sector
LAHORE: The government must formulate special policies and introduce a soft tax regime for the country’s real estate sector.
This was the result of the speeches made at a seminar on houses and real estate at the Commercial and Industrial Industry of Lahore (LCCI).
The seminar was attended by LCCI interim President Faheemur Rehman Saigal, Al-Jalil Developers Chairman Nasrullah Waraich, Federal Task Force on Housing Manager Zaigham Rizvi, renowned architects Professor Jason Pomeroy, Yaqoob Tahir Izhar, Akber Sheikh and Mian Abuzar Shad.
The experts noted that in Pakistan the population is growing rapidly, resulting in the expansion of residential areas and increased the need for food and other necessities.
LCCI interim president Faheemur Rehman Saigal said Pakistan is the only country in the region where residential areas are spreading every day, adding that no fundamental change in construction technologies has occurred since independence.
Citing an example from Singapore, he said in 1965-66, Singapore was one of the worst slums in the world. “But they’ve been working on it and now they have great community structures.”
He urged the government to take immediate measures to deal with the uncontrolled expansion of residential areas and consequent downsizing of the agricultural areas.
Saigal further stressed the need to bring the real estate sector within the formal economy, as it was the second largest sector in the context of employment.
The acting president of LCCI said real estate is an important sector of the economy that needs to be protected by favorable policies and a mild tax regime. “The sector has the potential to attract not only local investors but also foreign Pakistanis and foreign investors.”
He said the fungal growth of housing societies is consuming the agricultural land and is an agricultural land, Pakistan cannot afford it, suggesting that this issue could be addressed through horizontal housing developments.
“Despite being a dynamic sector with the capacity to attract huge foreign investment, the real estate sector has faced unfavorable circumstances and struggled to survive due to redundant policies and heavy taxation.”
He said the government will not be able to achieve its economic goals without the support of the business community, which suffers severely from the severe issues like attachment of bank accounts, political instability and heavy taxation on trade and industry.