KARACHI: Pakistanis bought property worth three billion
United Arab Emirates (UAE) dirhams (around Rs85bn) in Dubai during the
first half of this year, just behind Indians and Britons who plunked
down 7bn and 4bn dirhams, respectively.
In the last
two-and-a-half years, Pakistanis have invested over 18bn dirhams
(Rs512bn) in Dubai realty market, according to reports based on Dubai
Land Department appeared in the UAE media.
In 2015,
Indian nationals ranked the highest value foreigners, making property
transactions worth 20bn dirhams from 8,756 investors. Britons came in at
second with a total of 10bn dirhams worth of property transactions from
4,889 investors while Pakistanis ranked third with 8bn dirhams from
6,106 investors.
In 2014, Pakistanis were at second
position with 5,079 transactions with a total of 7.59-dirham investment.
Indians topped the list with purchase of 18.1bn dirhams worth of
property on 7,353 transactions, whereas Britons invested 9.32bn dirhams.
“Our
politicians, bureaucrats and some genuine buyers have lifted properties
in Dubai instead of local businessmen,” said Abdul Wahab Parekh, the
owner of Parekh Estate in Clifton. “Businessmen have pulled out their
money from banks after introduction of 0.3 to 0.6 per cent withholding
tax on filers and non-filers on tax returns. They have basically parked
their money abroad.”
However, property dealers in the
local market paint an uncertain future after the introduction of new
valuation rates, saying the real estate market has become inactive.
Mr
Parekh believed that after new valuation rates for property, the local
businessmen were unlikely to take the plunge and started buying property
in Dubai as the prices on that market have been in decline for more
than one year.
The new valuation rates look feasible for
the Defence Housing Authority (DHA) and Clifton, but for other areas of
Karachi the valuation rates seem overvalued, he said. “It’s surprising
that the federal government has decided the valuation rates instead of
provincial governments under the 18th Amendment.”
“The federal government cannot intervene where provincial governments are authorised to take decision,” he said.
However,
he said the property market has been very quite in terms of sale and
purchase deals since July 1 as only 15pc deals were struck which were
mutually agreed before July, but the sellers get 10-15pc less price.
However, many buyers and sellers postponed their transactions mutually.
He also claimed that about 80pc of black money found way into the real estate sector of Pakistan.
CEO
of Citi Associates in Clifton, Mohammad Shafi Jakvani, said the volume
of property transactions has shrunk and only 10-15pc deals have taken
place in DHA and Karachi Development Authority compared to the volume
before the introduction of latest finance bill.
Citing
reasons for huge price difference in official and open market prices, he
said the deputy commissioner valuation table was formed in 1986. Since
then, the market price has risen drastically. The markets saw three
bullish trend periods — first in 1993 to 1996, second in 2001 to 2005,
and third in 2011 till 2016.
The sale/purchase had become
negligible from July 2016 onwards as buyers and sellers had adopted
wait-and-see approach, especially after new valuation rates, said
Mohammad Najeeb, the owner of Nazimabad Estate in North Naziamabad. “The
new valuation rates are overvalued which may keep property buyers and
sellers in an uncertain situation for future deals.”
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