fbpx

Blog

real estate investments in pakistan

Coronavirus impact on Real Estate Investments Pakistan

Downtown Mall Liberty
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair. 24/7 Power backup -Parking 4 floors -Commercial shops 5 floors -Gym, sauna, steam -Roof Top Restaurant.
Learn more
7% Guaranteed Rental Returns
Only 2 Lacs Per Month
Register interest
Downtown Mall Liberty
Register interest
7% Guaranteed Rental returns
Only 2 Lacs Per Month
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair.

Coronavirus Impact on Real estate Investments Pakistan

The coronavirus pandemic is far from over, so knowing how to deal with your investments is paramount and also true for real estate investments. Commercial real estate sector is not the stock market. It’s slower moving and the leasing fundamentals don’t swing wildly from day to day. If the virus has a sustained and material impact on the broader economy, it will have feed through impacts on property as well.

Whilst it is true that warmer regions such as Pakistan are not as hard hit as colder regions in the world, still uncertainty looms. The backbone of Pakistan real estate are the expats who will take a substantial hit during this crisis.

Therefore, it is time to face the reality of some sort of global recession and it is time to implement the lessons we learned in 2008 and 2009.

Lessons from 2008 & 2009

Pakistan’s real estate market was already in recession when the last global recession hit, and although we saw a reduction in transactions, we did not see a huge downturn in prices as the market had already hit bottom before 2008. Thus, I believe we may not see any huge downturn except in certain underdeveloped areas.

In all of our posts since 2016 we have been advising everyone to stay clear of underdeveloped areas because:

“Anytime there’s uncertainty in the market, if something is not a must sell or a must buy, people are going to take their time and take a step back,”

Who wins and who loses?

There are going to be winners and there will be losers in the present scenario.

If you are going to go for panic selling or if you suffer liquidity problems and you need to cash in on your investments then this is the worst time to sell anything in real estate.

On the other hand if you have diversified your investments and have sufficient cash flows and liquidity, you win.

This is not forecast to be a long recession as the world is expected to get into the recovery and rebound stage in a year or two. We will witness some great opportunities to invest in coming days and anyone who has the liquidity or extra cash is going to reap the fruits in the near future.

Do and do nots of investment

Anything which is going to offer an immediate value of investment is worth looking at, but foremost are the rental generating properties.

Whilst we will see a general reduction in rentals overall (especially for the commercial rentals as small retailers and shopkeepers struggle), we always need a place to live. It is therefore wiser to invest in residential properties.

This will be spearheaded by luxury apartments which offer a much better rental return and even if the rentals are cut down by 1 to 2 percent a year, it won’t be a significant loss in cash flows.

It is wiser to invest in areas which offer instalments, depending on your requirement. It could be plots, houses or apartments. Investing in instalments, will give you the leverage of not investing all your money up front, even if you have it. In addition, your completion of instalments may well coincide with the rebounding market and give you huge capital gains with substantial ROI.

Do not invest all your money; you must keep a healthy cash flow. Ensure that your needs are being met through hard cash, salary, earnings or rental income for at least 2 years.

As of now, it is best to go for residential properties, for rental incomes. However, if you get a good bargain in commercial properties with solid rental generating prospects, take it.

Do not invest in areas which are not developed or being populated as of now, unless you can get your hands on an opportunity buy.

Remember liquidity is going to be scarce, so do not buy anything you want to sell out in 6 months, the minimum period you should plan to hold is 2 years.

Advice for young investors

If you are young with a long-term time horizon and you are able to sustain yourself and your family during this period, you just grin and bear it.

You must have an emergency fund already in place or a secure job and should be able to easily pay your bills. If you fall in this category, the downturn could be considered a ‘once in a decade’ buying opportunity for all young investors.

Advise for nearing retirement

If you are nearing retirement, start building your cash reserve. That means if you have to sell some assets, do so and the bigggest share of yoru real estate portfolio should go towards rental generating properties.

However, if you are going to spend the money in six months or two years, it shouldn’t be invested and should be kept as hard cash. You may also want to consider delaying your retirement. Instead, keep working for another year or two.

Advice for the retired

If you are retired and have substantial cash reserves, plenty of rental income at hand, then there is nothing to worry.

However, if you lack liquidity and solely depend on rental income, or investments that just meet your expenses, it may be a good idea to sell out some of your portfolio and keep a handy cash reserve.

 

Captain (Retd) Shahnawaz Yaqub Bhatti

Investment Consultant and CEO at Imlaak

Mob : +92 333 1616160 ( WhatsApp)

UAN : +92 3 111 777 555

 

The secret to our success is the loyalty & trust we share with our investors, we win, when you win.
WE DONOT PREDICT TRENDS WE MAKE THEM HAPPEN
Subscribe
We hate spam as much as you do, and you can unsubscribe anytime.

Leave a Reply

avatar

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  Subscribe  
Notify of
Downtown Mall Liberty
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair. 24/7 Power backup -Parking 4 floors -Commercial shops 5 floors -Gym, sauna, steam -Roof Top Restaurant.
Learn more
7% Guaranteed Rental Returns
Only 2 Lacs Per Month
Register interest
Downtown Mall Liberty
Register interest
7% Guaranteed Rental returns
Only 2 Lacs Per Month
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair.
Downtown Mall Liberty
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair. 24/7 Power backup -Parking 4 floors -Commercial shops 5 floors -Gym, sauna, steam -Roof Top Restaurant.
Learn more
7% Guaranteed Rental Returns
Only 2 Lacs Per Month
Register interest
Downtown Mall Liberty
Register interest
7% Guaranteed Rental returns
Only 2 Lacs Per Month
Fully serviced luxury hotel apartments in the heart of Gulberg, furnished by Wing Chair.
The secret to our success is the loyalty & trust we share with our investors, we win, when you win.
WE DONOT PREDICT TRENDS WE MAKE THEM HAPPEN
Subscribe
We hate spam as much as you do, and you can unsubscribe anytime.
LIFE IS ABOUT MAKING CHOICES & WE WILL HELP YOU MAKE THE RIGHT ONE
We have your back, no matter where you want to invest, we bring you the best developers and projects from around the Globe.
FIND ME THE BEST CHOICE
LIFE IS ABOUT MAKING CHOICES & WE WILL HELP YOU MAKE THE RIGHT ONE
FIND ME THE BEST CHOICE
LET US DO THE HARD WORK SO YOU DO NOT HAVE TO
Join the luxury of our managed real estate services to find out when, where and how to invest .
APPLY NOW FOR OUR SOLUTION
What are your goals?
Your destination?
Capital Gains
Rental Returns
Pakistan
Dubai
Let us do the hard work so you do not have to
Join the luxury of our managed real estate services to find out when, where and how to invest .
APPLY NOW FOR OUR SOLUTION
Rental Returns
Pakistan
Capital Gains
Dubai
Your goals?
Your destination?
Get access to the real information, subscribe our BLOG
Subscribe Now!
No spam ever, unsubscribe anytime.
REAL ESTATE WITH REAL INFO
Subscribe Now
REAL ESTATE WITH REAL INFO
Subscribe