Think Twice Before Investing in Plots in LDA City
Lahore Group (LDA Experts)The current market situation is complicated by the current Coronavirus epidemic. This requires deliberate effort to take advantage of the government's construction relief package to invest in plots. The real estate market has reacted positively to the government's move, and investment-based buying is booming. In most areas of LDA Lahore, prices have regained their lost glory and prices are almost equal in 2018 in terms of US dollars. Although calculated in US dollars, there has been no significant gain so far.
This was expected and we told everyone about the increase in real estate back in April 2020. However, the market was thirsty and barely a 30% increase in prices in 2 months, filling this gap, no one understood.
However, the big question is, will it continue at the same pace and for how long? Let's find the answers to these questions with logic and reality and study if investing in plots is a viable option at the moment.
Ox and bear
Bulls argue that Pakistan real estate has the potential to grow many times over. However, statistics show that it increases by only 10 to 15% per year at most. However, price increases from 2002 to 2004 and then from 2011 to 2013 suggest that real estate offers some great opportunities for speculative trading.
If you are investing in plots, there is an aspect of this trend in Lahore. While the newly developed areas benefited, the old ones stopped benefiting significantly. This trend can be attributed to two things.
The new stages are better developed than the previous ones and offer a better life. The value of plots is determined by the ability to invest rather than the actual demand.
Although prices should be affected to some extent in new stages, I think the biggest reason for the increase in prices is investment-based purchases. That is why, as some stages reach maturity, investors begin to move towards the advanced stages which give them growth while the old stages bring slow returns.
Lack of housing
Another argument of the Bills is that Pakistan is facing a shortage of 10 million houses. This gap is widening every year and is expected to reach 13 million by 2025. This confirms the claim that we need more plots for our growing demand and as supply falls short of demand, property prices will rise.
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