Rents are falling as property prices are crashing. Great for small businesses and tenants.

[JohnSnow]

Pakistan is not the only country where property prices are falling. After a major decline in prices in US & China, now Hong Kong market is also collapsing. But there is silver lining in all this. It is great news for small business and house renters as lower prices means lower rents. Especially, for businesses it is a god-sent help. Now they will become more profitable and will create more jobs. Keep in mind that small businesses can create more jobs quickly than any other industry in Pakistan.

Rents, while at an all-time high right now, may be getting ready to fall.

In the past three housing downturns, rents and home prices fell – substantially – in tandem.

And data show that home prices have already started to slip, prompting some property watchers to think that a dramatic shift may be getting underway in the world’s least affordable housing market.

“Whenever home prices drop, rents will drop. There is never an exception,” said Nicole Wong, the regional head of property research at CLSA. “As the sentiment further dips, we will see more individual landlords who hold bearish outlooks on the property market soon lowering down their rents to get property leased as soon as possible.”

Source

 

[thinking]

When PM housing project take off.. Property prices..rent homes..offices price will decrease more...Malik Riaz Thekay Dar ,100 billions recover and put in Dams fund..Saad Rafique Paragon empire fell down..and others housing scheme also.. Peoples will relief on high price homes.. plots..offices..rent price...

 

[JohnSnow]

When PM housing project take off.. Property prices..rent homes..offices price will decrease more...Malik Riaz Thekay Dar ,100 billions recover and put in Dams fund..Saad Rafique Paragon empire fell down..and others housing scheme also.. Peoples will relief on high price homes.. plots..offices..rent price...

Land Mafia Like Malik Riaz and Saad Rafiques should be banned for life to conduct any property business in Pakistan.

Although I am not applying for this house, I am hoping that Imran Khan become successful in provinding a respectable home for everyone in Pakistan.

Last 5 years have been disaster for Pakistan real estate. High prices of plots destroyed so many dreams of families. Also so many young kids left Pakistan because high costs made impossible for them to start businesses.

 

[imran_hosein_fan]

billi k khuwaab mein cheecharay, karachi is still a hot market, aik flat he 4 5 crore ka hogaya hai udhar, gated community mein

 

[Eyeaan]

“Whenever home prices drop, rents will drop. There is never an exception,” said Nicole Wong,
Source

This comment is not related to the current Pak market:
When the prices drop, the profits of construction industry will drop resulting in lesser investments in housing which means lesser homes in the future market and higher rents in the longer run. Isn't it?
Perhaps the key is why prices are dropping; if it was because of glut, the prices will jump back after due adjustment. In that case the drop of housing prices is business as usual. Drop in prices because of relative profitability, banking sector or other reasons is another matter that may have long term impact.

 

[Glock]

There's is no fall in house prices..

Anyone claiming so, should put his name and address here, and we'll contact him to provide us a 5 crore house/plot at 3 crores!

My dear.... Cost of construction has sky rocketted... Steel at this time is around 103000 per Tonne, cement at above 600 per bag and crushed stone /sand has also appreciated....

Steel last year was 76000 per Tonne... Cement 460 per bag..

How are house prices falling bhai?

Anyone who has spent above 1 crore on any shop in any mall will still not let out his shop for office/business at reduced rate..

So kindly do not circulate Hong Kong news here without knowing the ground realities of the local estate sector..

People who purchased expensive plots will retain their plots till times are better... Why the heck would they sell at reduced prices?

This is Pakistan my dear... Things here go up, never down...

As for IK housing schemes... Well.... They won't affect the rest of the construction biz... Those houses are meant to be budget houses for the lower sector of the society... Won't have any effect at all upon the remaining housing schemes where middle/upper middle/elite class build...

 

[thinking]

Straight things..Pakistan even don't have 2% trend to long term installments houses.while world have more than 50% ..peoples purchased home cash or buy plots.or lived for life in rent houses..when this long term installments projects started.a lots peoples leave rent houses..no cash paid build home..why not property price.rent price..going down???This land Mafias knowingly increase property price...with the help of politicians Mafias..

 

[JohnSnow]

This comment is not related to the current Pak market:
When the prices drop, the profits of construction industry will drop resulting in lesser investments in housing which means lesser homes in the future market and higher rents in the longer run. Isn't it?
Perhaps the key is why prices are dropping; if it was because of glut, the prices will jump back after due adjustment. In that case the drop of housing prices is business as usual. Drop in prices because of relative profitability, banking sector or other reasons is another matter that may have long term impact.

Low prices of plots means more construction and more houses. Are you out of your mind. Construction material will remain same or go up. Only plot prices collapsing which is helping boom in construction business as more people will be able to start their new home.

 

[JohnSnow]

billi k khuwaab mein cheecharay, karachi is still a hot market, aik flat he 4 5 crore ka hogaya hai udhar, gated community mein

You should listen to your finance minister who said that market is collapsing and they are trying to move investments out of property towards the real businesses which will create more employment and economic activity.

 

[JohnSnow]

There's is no fall in house prices..

Anyone claiming so, should put his name and address here, and we'll contact him to provide us a 5 crore house/plot at 3 crores!

My dear.... Cost of construction has sky rocketted... Steel at this time is around 103000 per Tonne, cement at above 600 per bag and crushed stone /sand has also appreciated....

Steel last year was 76000 per Tonne... Cement 460 per bag..

How are house prices falling bhai?

Anyone who has spent above 1 crore on any shop in any mall will still not let out his shop for office/business at reduced rate..

So kindly do not circulate Hong Kong news here without knowing the ground realities of the local estate sector..

People who purchased expensive plots will retain their plots till times are better... Why the heck would they sell at reduced prices?

This is Pakistan my dear... Things here go up, never down...

As for IK housing schemes... Well.... They won't affect the rest of the construction biz... Those houses are meant to be budget houses for the lower sector of the society... Won't have any effect at all upon the remaining housing schemes where middle/upper middle/elite class build...

Property prices dropped by 30% so far. Source

Only liar dealers, investors and touts marketing people like zameen website are liars who keep fooling innocent citizens. There is no buyers in the market. Property offices are shutting down their doors. But still they keep lying like you are lying on this forum. Plot prices collapsed bigtime especially for Bahria & other private housing societies.

 

[Eyeaan]

Low prices of plots means more construction and more houses. Are you out of your mind. Construction material will remain same or go up. Only plot prices collapsing which is helping boom in construction business as more people will be able to start their new home.

I clarified that my comment is not about Pakistan. Your initial argument in the post had no relevance to the Pakistan either.
In certain markets, there is one and only one variable which controls the construction market and that is the mortgage interest rates - which is determined by the government and central bank. Another factor is relative profitability of construction industry w.r.t. financial market. Third factor is the property taxes. The engine of construction industry is run by the banking sector + the government policies that determine the housing needs + cities that want to expand in certain areas _ regulations.
Cost of land or construction cost do not matter much as they are a small part of total investment. (Profit margin of builders/material costs/regulations etc. is a separate issue) Funds are also not a bigger issue as the 'mortgage funds' are created by the banks against the future payments. - that is customer takes the mortgage and the bank add that much amount into its accounts.
Two more comments about the construction industry. (not of Pakistan but the countries where money supply is strictly controlled by the government and the government hold >50% of economy - unlike that in Pakistan where about 10-13% of the economy is in the hand of the state)

If the rents are fixed, or lowered in an area, the incentive for new construction is less and this results in the lack of maintenance of the existing buildings- this may give you variable results, good or bad as maybe the local economy.
Second the construction/housing industry is a development work meaning its effects/benefits are not limited to the home owners but much broader and spread over decades. Local taxes from property tax and land worth of a region come to play. Expenditures on mortgages/rents are often the largest part of the household expenditure so it is an integral part of the net economy of a region/country along with employment. Thus construction/housing business is important part of state policy/central bank policy and differingt political visions and ideologies.

 

[Glock]

Property prices dropped by 30% so far. Source

Only liar dealers, investors and touts marketing people like zameen website are liars who keep fooling innocent citizens. There is no buyers in the market. Property offices are shutting down their doors. But still they keep lying like you are lying on this forum. Plot prices collapsed bigtime especially for Bahria & other private housing societies.

Why are you so aggressive with your posts?

I was trying to tell you that due to recent inflation, construction has become more expensive, so houses will get costlier to build and therefore also sold higher priced..this is natural, don't you see?

Can't fathom your defensive posts, like a kitten fighting back with claws for no reason at all....

Ok.....everything has become cheaper, let's celebrate!

 

[JohnSnow]

Why are you so aggressive with your posts?

I was trying to tell you that due to recent inflation, construction has become more expensive, so houses will get costlier to build and therefore also sold higher priced..this is natural, don't you see?

Can't fathom your defensive posts, like a kitten fighting back with claws for no reason at all....

Ok.....everything has become cheaper, let's celebrate!

Also, don't forget to Thanks Imran khan and PTI government who is cracking down on these crooks and helping lower prices.

Shukriya Imran Khan.