Despite Coronavirus has very alarming consequences in the various industries across the globe but if we talk about the real estate sector of Pakistan, the Covid-19 is going to further boom the transition of real estate towards construction, installment-plans, high rise and developed areas as compared to non-possession plots & files.
The government is taking realistic measures to enhance the construction of real estate projects and to move things gradually in the right direction. The recently announced real estate relief package is also part of the government’s efforts to keep things sorted in the real estate sector.
Many experts believe that this package will be a game-changer and result in drastic improvement in the near future. Essentially, there are three segments to consider for investment these days.
Residential Possession Plots
The investment in residential plots can be lucrative. Real estate gurus believe that investments in residential plots in certain sectors will outperform commercials and vice versa.
However, to utilize the amnesty on the source of income, you have to wind-up construction before September 2022. The impact of this amnesty will be seen in developed areas as these areas will receive the major portion of black money present in the market.
The other major attraction that may put residential plots ahead of commercial plots is the possible opportunity of house financing. There’s a fair chance that the finance will only be available for residential plots. Therefore, the residential plots will get an edge over commercial plots.
Commercial Possession Plots
If we consider the implementation of the source of income amnesty on commercial possession plots, then it will only apply to those projects where you can start construction before 31st Dec 2020. Therefore, any construction after this date will not be eligible for investment under amnesty. Moreover, any files or non-possession plots in such developed phases cannot utilize amnesty.
Notably, you’ve to complete your construction before Sep 2022 to enjoy amnesty given by the government.
Since purchasing a plot is not enough to avail amnesty, you need to actually start construction for it. That’s why if the demand for construction will be created in any sector, the plot prices will rise and there’s a fair chance of making one against your investment even if you’ve invested without the plan of construction.
Commercial projects include all the business avenues including malls, apartments, independent commercial and residential units, offices, etc, At this time, you can invest in independent commercial and residential units utilizing the amnesty given by the govt. However, the return of your investment will largely depend on the quality of construction and your previous satisfied clients (if any). This situation will be beneficial for professional builders as they construct houses at a lower cost and sell on huge profits.
Just in case, you’re not an experienced builder, and you need to make an investment to avail amnesty or/and for the capital gains then we will recommend you to go for commercial buildings/malls.
The reason we haven’t recommended you independent commercial and residential units is that if you’re not an experienced builder, and opt to invest in independent units of houses and commercials, there’s a chance that this investment may go in vain. There’s a high risk of low profits and if the situation goes worst, your investment may be stuck for a longer duration.