real estate

Who got rich through real estate?

We have mentioned time and time again that real estate is one of the most lucrative industries in Pakistan and while that is true, this industry is not only attractive for investors in this part of the world but is just as promising all over the planet! The real estate industry has created numerous billionaires and this is a universal truth, applicable in most countries around the world.

Twenty-two people rose to the heights of making the Forbes Billionaires List because of their real estate holdings in 2016 and a huge 184 people are now part of the list of the uber-wealthy because they are property rich! China is riding high and is approaching the level of the USA with 42 billionaires to its name while the USA has a staggering 44! Hong Kong is not far with 25 and Singapore is trailing behind with six while other countries have also made the list with their own respective count of real estate billionaires.

So, who got rich through real estate? There are many worth mentioning but let me highlight a few of the world’s top real estate tycoons to give a tad bit of inspiration to the real estate enthusiasts of this country! While this list does not contain any Pakistanis yet, there is no telling what the future may hold!

So, here goes the list of some of the people who own big buildings and have even bigger bank accounts!

Wang Jianlin

Wang Jianlin is from China and is currently the world’s richest real estate enthusiast according to Forbes with a net worth of $28.7 billion. Ranking 18th in the list of the world’s richest billionaires, Wang Jianlin began his journey to riches as a commercial real estate developer, constructing shopping malls and hotels and is the very proud owner of Wanda Commercial Properties.

Seems like going commercial pays!

Lee Shau Kee

Hong Kong’s Lee Shau Kee stands in second place with a net worth of a grand $21.5 billion and is placed 31st on Forbes Billionaires List. Surprisingly, Lee has a very modest background but is now the owner of an investment portfolio containing real estate and hotels with other collateral. His empire is led by Henderson Land Development and he is paving his way to further success!

He is certainly an illustration of the saying, “Hard work pays off”!

Michael Otto

Swerving from the Asia-Pacific region, our next real estate tycoon is from Germany. Michael Otto has a net worth of $15.4 billion and the Forbes Billionaires List ranks him 51st in the world’s top billionaires. Highly active in the real estate sector, Michael’s family owns ECE Group, a constructor of shopping centres all around the world. The group also builds logistics centres, company headquarters, industrial buildings, and special purpose properties. He and his family also manage a project consisting of 8,300 apartments!

Wow Michael, that is an impressive number of properties!

Donald Bren

The fourth richest property monger in the world, Donald Bren is American and has a net worth of $15.1 billion. Standing at number 54 in the Billionaires List, Donald owns Irvine Company which has 500 office buildings, 50,000 apartments, 40 shopping centres, three hotels, and several other holdings. Notably, he also has a 97% share in Manhattan’s Met Life building!

Astounded? Me too!

It is amazing how much people have earned through the real estate sector and the numbers mentioned have made me slightly dizzy! While the list is endless, we can stop here and perhaps continue another time! Meanwhile, Pakistani investors need to get their investment antennas in place and propel into property havens to make big bucks as there is plenty of potential!

Do you have something to say about getting rich through real estate? I would love to hear your views in the comments below!

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apna ghar

Apna Ghar scheme in the limelight once again

Apna Ghar, a state-owned project planned in November 2013 to provide low-cost housing units, is once again being discussed by the authorities concerned.

According to news reports published in national dailies today, the finance ministry has instructed the Ministry of Housing and Works to prepare a plan for this project. Reportedly, a company titled “Apna Ghar” has already been registered with the Security and Exchange Commission of Pakistan.

When launched in 2013, it was planned that low-cost housing schemes would be launched in Khyber Pakhtunkhwa, Baluchistan and Punjab for those belonging to the low-income strata.

A few months ago, the Supreme Court of Pakistan also instructed the government to initiate low-cost housing schemes for homeless people in the country.

While many people are bound to live in shantytowns, the housing shortfall in the country is mounting continuously. Many shantytowns were also raised in the past and the actions taken to raise such slums located on the government’s land met with massive resistance from the dwellers. Such matters are often taken to mainstream media, arousing sympathy for the homeless.

The Supreme Court of Pakistan believes that the initiation of low-cost housing schemes by the government is the only solution to stop the development of shantytowns in the country. It is expected that the Apna Ghar scheme will help reduce the housing shortfall in the country.

Security and Exchange Commission of Pakistan Senior Joint Secretary Akhtar Jan Wazir told reporters that the governments of Khyber Pakhtunkhwa and Baluchistan have agreed to provide free-of-cost land for the Apna Ghar scheme in various districts, while land will be purchased at economical rates in Gwadar, and several other districts of Punjab and Gilgit-Baltistan.

Reportedly, the Ministry of Housing and Works has sent a summary to the finance ministry, asking for PKR 500 million to purchase land in different parts of the country for initiating the Apna Ghar scheme. I have great hopes that this project, for all the right reasons, will progress at a rapid pace and provide people with an opportunity to buy a home of their own.

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Islamabad International Airport to be inaugurated on August 14, 2017

The inauguration of the New Islamabad International Airport has been delayed a couple of times in the past due to improper planning and mismanagement. The project missed two deadlines in October and December 2016. You can read more about the issues that kept the facility from becoming operational last year by clicking here.

As of late, things seem to be changing as Prime Minister (PM) Nawaz Sharif is more interested in inaugurating the project during his tenure. On January 19, 2017, Federal Planning Minister Ahsan Iqbal talked to the press from the premises of this facility, stating that the PM will inaugurate the New Islamabad International Airport this year on August 14. According to Iqbal, the inauguration would be a gift from the PM to the nation on the 70th Independence Day of Pakistan.

Iqbal couldn’t help mentioning how difficult it has been for the government to continue with development work on the new airport, which had genuine flaws. The flaws included its poor design, poor road access, water shortage and problems regarding gas and electricity supply. He also threw light on how effectively the government has dealt with these issues and has added additional facilities such as a Category III runway instead of Category II, construction of 15 bridges instead of 9, installation of a new grid station, and laying down of a new gas pipeline.

Commenting on the current status of the project, Iqbal said that the airport is about 90% complete so far and the remaining 10% will be completed in another 7 months. In anticipation of the airport’s opening and also due to the addition of new link roads connecting the airport with Kashmir Highway, the neighbouring housing societies have been witnessing a constant rise in demand and rates of property.

During the last few months, a prominent rise in property prices has been seen in Faisal Town, Shalimar Town, Top City-1 and Mumtaz City. Real estate experts expect that property rates in the mentioned society as well as several others located in close proximity to the new airport will see a further 25% rise in rates in the next 5 months.


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An overview of the current market situation in Islamabad

Among the real estate markets of prime cities in Pakistan, the signs of recovery are more apparent in Islamabad. Property agents from the capital city also confirm this and they attribute the improvement in property transaction volume to the price drop seen during the second half of the year.

The stagnancy that prevailed in the market after the announcement of the new tax regime on July 1, 2016 has rather set positive norms in the market. Speculative trading came to an end with prospects of paying a higher percentage of property tax on each transaction. In addition to that, the involvement of genuine buyers in property-related affairs has also given strength to solid, on-ground real estate developments. So clearly, there is limited room left for property flipping in the current scenario.

Real estate agents from Islamabad also find the present market situation conducive to steady growth in property prices. These agents are of the view that anyone who buys or sells property in Islamabad can reap good gains in the long term, leaving little room for speculative trading. Getting such feedback from agents surely is a positive sign and it indicates that a large percentage of people who have a stake in the property sector, aren’t fond of extreme highs and lows in the property trade volume.

The societies that failed to register an increase in rates didn’t see any stark drop either. The value of real estate in Sector E-11, B-17, Gulberg Residencia, and Bahria Town increased marginally, while a nominal price drop was recorded for plots in DHA Islamabad and Sector F-11 during the month.

From the price trends recorded in December, it can be safely deduced that Islamabad’s real estate sector is now on track to establish solid ground for future trading, backed by genuine buyers and long term investors. We also hope to see a better 2017 and expect to see some positive developments in DHA Valley too – a project where plot owners have been waiting to be given possession for years

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President signs amnesty scheme bill

The Income Tax Amendment Act 2016 has been signed by President Mamnoon Hussain. With this, the real estate tax amnesty scheme has gotten legal cover. Experts hope that the scheme will drag the real estate market out of the standstill it has been facing for over 5 months.

It is generally believed that pressure exerted by the business community, protests held by real estate agents and the influence of big investors together forced the government to announce this amnesty scheme. This could be partly true, but I believe that a stark drop in the revenue collected from the property sector has played a bigger role in this regard.

Reportedly, the Federal Board of Revenue (FBR) is currently facing a shortfall of PKR 100 billion in its budgeted tax revenue. A major chunk of this revenue is collected from the real estate sector, which has seen a drop of over 80% in transaction volume since July 2016. Furthermore, the new tax collection mechanism invoked a potentially harmful situation for the construction sector, affecting projects worth PKR 100 billion. Now that the amnesty scheme has been approved, the FBR hopes to collect PKR 50 billion in terms of tax revenue from the property sector.

Those interested in availing the amnesty scheme would be required to pay 3% tax on the difference between the DC rate and the rates notified by the FBR in its valuation tables. Reportedly, the new bill will be applicable for the properties purchased before July 2016. A tax official told reporters that the government would consider whether the scheme should continue, in the next budget.

Those looking to avail this scheme will not be probed about the source of money they invested in the property sector.

The Income Tax Amendment Act 2016 has exempted the families of martyred army, rangers and police officers from Capital Gains Tax and Withholding Tax on the sale of property inherited by or awarded to them. Furthermore, property worth PKR 4 million or less will also be exempted from Withholding Tax.

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Rise Of Trump & Pakistan Real Estate

Rise Of Trump & Pakistan Real Estate

So the unthinkable has happened and Donald Trump is the elected President of the USA. The world is in shock and awe with a mixed and confused reaction to this historic upset in US elections. What does this mean for Pakistan in general, specially the Pakistani’s living in United States and how it can impact the Pakistan real estate market.

Although for some implicating Trump’s victory with Pakistan real estate may be far fetched. However we should keep in mind that policies of USA not only effect Pakistan but the entire globe.

Policy for Expats and Immigrants

Trump has taken a hard stance on Muslims including Pakistani’s and even if one considers it election rhetoric , it is clearly not a rhetoric for his supporters. Under Trump rule Muslim immigrants will face more racism and stricter Government policies. I do not think so that it will be some apocalyptic situation. Muslims will however be subject to general isolation as we saw after 9-11. It may not be to that scale but 11-9 will certainly make quite a few to remember there homeland Pakistan.

Policy on Visa & Immigration

Under Trump the US policy of Visa and Immigration for Muslims in general including Pakistani’s will be harder. Also a lot of Pakistani’s will prefer immigrating to other places or just staying port. In case Trumps radical policies show positive results, other European nations may follow suit.

Pakistan-India relations

In general i think Trump may actually be good for Pakistan – India relations. He has shown his interest to mediate between the two arched nuclear rivals as well.

Recently Trump made a reference to Pakistan in response to a question if he would support Modi government’s action against Islamabad amid escalating cross-border tension.

To this Trump said: “Well, I would love to see Pakistan and India get along, because that’s a very, very hot tinderbox…. That would be a very great thing. I hope they can do it.”

He further added that he would be happy to ‘mediate’ between the two neighbors to defuse the situation.

Support of CPEC

Trump has shown his interest in developing good relations with both China and Russia. This may be good news for the CPEC project as both Russia and China are showing a lot of interest in developing it. This could mean that USA may actually support the development of CPEC and Pakistan real estate specially in Gwadar will reap the benefits.

Impact on Real Estate

The real estate market of Pakistan is very much speculative and it may respond positively. Rise of Trump may be bad news for some but back home, this is good news for Pakistan. Expat Pakistani’s will bring newer opportunities and they may follow a similar trend of shifting investments back to Pakistan as after 9-11. One more important factor to consider is that Trump may actually be good for South Asia. He has repeatedly said that he wants to work along China and wants good relations between India and Pakistan. If Trump uses his position to stabilize the  rivals in South Asia that may be a very good news not only for Asia but rest of the world.

This may give the needed boost to the Pakistan real estate sector. Investors will put some money back into the real estate sectors hoping for prices to rise under the speculation of foreign direct investments and a safer South Asia.

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5 ways to make quick money in real estate

5 ways to make money in real estate

People have become millionaires in a very short span because of property trading as well as development but foremost it’s the land value that has appreciated. Value addition to the raw commodity has given good returns as well but it’s the actual price of land which seems to land higher profits. The opportunity to make money in real estate is open for everyone and does not require a special set of skills.

Even the billionaire American President Mr. Donald Trump is a real estate tycoon. In Pakistan particularly we look at Mr. Malik Riaz in the same manner. There are ways to make money in real estate.

“Be greedy when others are afraid be afraid when others are greedy”.

In this article we will focus on short term trades and how to go about it.

There are 5 basic ways to make money in realty explained below. Some points might only relate to the Pakistan realty market otherwise they are applicable around the Globe.


1.) A general rule of thumb is to be on the lookout for a plot which is cheaper than the market. This could be due to various reasons e.g. a person needs to make a further payment and is stuck, a person might be moving therefore, selling his/her assets, etc. In the current market situation in Pakistan there are many opportunities especially pertinent to DHA Lahore.

When going for such buying at a cheaper rate be aware to include your transfer expenses as well as taxes in the buying price to make sure that the plot remains at a lower price in the current market even after having it transferred to your name. Such people hardly give you grace period on Biyana as they are in immediate need of money. Do not think twice if such an opportunity knocks to make money quick.

2.) When a renowned developer of society launches anew project at a reasonable or good location. When DHA announces a new Phase or a new development there is always the element of abnormal appreciation initially. It is advisable to grasp such an opportunity when it makes itself available. In today’s case it would be Phase 10 files when they are available in the market. Be sure to buy when a bulk becomes available, not when there are only a limited number of files and more are expected to come.

Either buy in the beginning when limited number of plots or files are launched in an area, or buy when a bulk is available in the market of a particular file or plot in case thereare a handful initially but you expect more to come. People who had initially bought DHA Gujranwala, DHA Multan or Bahawalpur have earned reasonable profits in the initial jump. Do not fall for greed sell when you see a reasonable profit because in the longer run if you calculate time value of money you might actually lose out instead of gaining. In the same connotation when Bahria announces a new project there is a profit on installment plans which is called‘Own’ after which a natural cycle is that the prices dip to less than even the booking price in 70% of the Bahria Town cases. In DHA however, the case is a little different there are good hefty gains after which the price falls but to a reasonable extent and sometimes it sticks to the high end price for a longer period of time.


3.) Another element which is very vital is in terms of trading. For this purpose you need to have a keen eye on the market pulse. This is when you need a good real estate consultant who is always present in market and knows about the current trends of the market. This accounts for the fastest buck in the real estate market.

The realtor or yourself buys a commodity whether a plot or file if the particular commodity is upward trending. In some cases the overall market is going upwards in which case you have the opportunity to play anywhere within your budget, whatever agreement to sell that you enter you know you would come out at the top. It is advisable to have a good consultant in this case who will tell you when and what to buy and when to sell and what to sell out of your portfolio. In a downward trending market this is also applicable as there has been no instance in history where everything falls, there is always that one commodity or society which seems to go up. It is not necessarily a plot in a society or file, it could be open land as well. For example in July, 2016 property market has seen a downtrend in Pakistan but then there is Gwadar which is going up, there are pieces of land which are going up, DHA 9 Town file has gone up.

4.) If you understand property you know that there is an actual price of a commodity whether plot, file, open land, building etc. If the price falls below the actual value of a price it is the time to buy because sooner or later market correction will come into play and you can make some quick money.

An example could be that Plot A in a society can be valued at a price of 20 million it reached a high of 25 million (this is the time to sell) as the market was going up and due to macro and micro economic factors or change of policy has dipped to 16 million (this is the time to buy). A real time example of this would be the correction that has taken place in files, after the policy change of government the files dipped exponentially by 6-8 million this was the time to buy and then became stable after gaining 4 million.

Although the market is down as of November 2016 the files gained 4 million and are believed to be still below the genuine assessment of the property, but buying at a low gives you a good exit and is still a good buy for the long run. We are discussing a short term trade therefore, the prior is applicable. The same would happen in Phase 8 U, V, S, and T block as well. Assessment is either done by a professional realtor or you if you are in the business.

5.)The last and the most profitable along with a bigger investment is value addition which means buying an open piece of land and developing it into either a society or a building if the land is smaller.

This might take 6-8 months to break even after which every dime would be your profit on the project. For this you need to spend heavily on marketing, do not be a miser when it comes to marketing, it is only marketing which will sell the project. For this you need investment for land, and for the initial infrastructure along with marketing expenses. You need to give heavy commissions to the realtors, real estate agents, incentivize them heavily as it is the real estate agents which will sell your property and make it profitable.

Buy a piece of land which is easily accessible, build the initial infrastructure which will include the society gate, main boulevard of the society and a few grey structures, then bring agents into your panel one main agent who will be incentivized at a good percentage and will further a major chunk to the market, you can hire a marketing company or if the agent is capable enough he can do it for you. A society map is essential have it done by a professional with 60% residential and 20% commercial commodity with 10% dedicated to common areas and parks. This would be done out of the 70% of the land which would be left after infrastructure layout.


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Beware of your tenants !

Beware of your tenants !

The Government has rolled out a notification in national dailies today, warning property dealers and owners of houses, hostels and hotels to take note of the identification and activities of their tenants and guests.

Under the Sindh Information of Temporary Residents Act 2015, the provincial government has made it mandatory for property owners and real estate agents to gather complete details of tenants and submit them to their local police station within 48 hours.

On the other hand, hotel and hostel owners are required to verify the identity of their guests and provide all the relevant information to their local police station within 3 hours of the arrival of the guest.

The government has also made it compulsory for property owners and managers of hostels/hotels and even real estate agents to ensure that the tenants/guests do not possess any weapon or explosive. However, if they possess a licensed weapon, full details of the same are required to be provided to the local police station.

If anyone fails to submit all the required information to the authorities concerned, they will have to face untoward consequences. Violation of the laws imposed by the government can result in imprisonment of up to 6 months or a penalty of PKR 45,000.

I believe this is a promising move by the Sindh government to improve law and order in the province. Owners of houses, hotels and hostels should also abide by these rules to help the government achieve its mission.

We all know that improved law and order in Karachi has played a significant role in increasing investor confidence in the city’s real estate sector and amplifying property prices. Similarly, the rules set by the government for proper identification of tenants/guests can also play an important role in strengthening the housing sector and hotel industry of the entire province.

What do you think about this development? Share your views in the comments section below.

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Advantages & Disadvantages Of Living Near A Commercial Area

There are certain factors that make a piece of property more difficult to sell, and among them is proximity to a busy highway, commercial area, power grids and railroads, etc.

Among these, being located near a commercial is what I’m going to talk about in this post and walk you through the pros and cons in detail.

For instance, are you a shopaholic? Or a foodie? Do you often find yourself yearning for easy access to Y Block, DHA Lahore (one of the most bustling commercial avenues in the city) because it would take just one short and convenient trip to get your clothes ready for a party or a family function? Do you have to overpay the rikshawala to get to Liberty Market because of the hopeless traffic jams on the way?

If you nodded your head in response to all these questions, then living next to or near a commercial area must have crossed your mind.

Just imagine, you’ll always be at the central area of your locality. You’ll have uninterrupted, quick and easy access to every shop that’s trending, every boutique and every restaurant that delivers scrumptious bites of heavenly food, at all times of the day.

Probably shouldn’t talk about food while I’m fasting, though. *Ominous stomach rumble*

Anyway, with a large number of services at your doorstep, easier free delivery options, proximity to main roads, hospitals, hotels, pharmacies, tailors, cinemas, living near commercial areas isn’t really that bad a deal.

Also, by residing in a commercial area, you’ll be making a huge statement in terms of your socio-economic status amongst fellow biraadri members. Smirk all you want, that stuff matters to a lot of people.  

To top it all, your house would still possess good resale value. This, of course, depends on the exact location, but a home at a decent yet walkable distance from a large commercial centre is almost always going to be in demand and, therefore, prone to frequent upward revisions in price.

So, why not live near a commercial area? Let me show you the flip side of this deal.

With a house in a commercial area, you are likely to be stranded in unending car jams almost regularly. Going to work or school, or coming back to your home near iftar time, chances of untimely delays in your route are practically guaranteed.

And I won’t beat around the bush: the view is not pleasing. Buildings block your line of sight every 20 feet. There are no parks and power cutoffs are more frequent due to the large amount of energy taken up by commercial buildings. Even though gym facilities and pools might be close by, getting there becomes more of a hassle when you have to pass through a vivacious commercial area.

The cost of living is also relatively higher. Obviously, rates in a popular commercial locality are always high for utilities and other amenities. For example, you might find out that rental rates on MM Alam Road in Gulberg, Lahore are much higher than in the more pleasant areas of Gulberg, or a residential area like Model Town. Bear in mind that Model Town itself is an area known for high real estate values.

But the strongest factor working against the idea of living in commercial hub is noise pollution, which is a deal-breaker for many people. You will have to get used to waking up to the awful sound of steel shutters being slid up every day, and remain at the mercy of trucks, buses, cars and motorcycles impatiently honking away as they try to navigate their way out of a jam for the rest of the day – and night. Not a pretty picture, is it?

So my verdict is this: in spite of small inconveniences, living in purpose-built residential colonies is an incomparable experience in terms of peace of mind, livability and security. However, proximity to commercial areas – despite its share of problems – comes with some unbeatable facilities.

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E-stamp paper system to become functional from October 26

E-stamp paper system will be implemented throughout Punjab from October 26, 2016, Punjab Information Technology Board (PITB) Chairman Dr Umer Saif told reporters.

According to Saif, the implementation of e-stamp paper system will allow the government to achieve another milestone in its mission of promoting transparent e-governance. He also told reporters that PITB is currently working in the Sahiwal division and will finish its operations within this week to implement the e-stamp paper system throughout the province.

E-stamp paper system launched in Faisalabad

E-stamp paper system has been launched in Faisalabad for depositing stamp fees in order to end corruption in this respect.
Under a project of the Board of Revenue Punjab and the Punjab Information Technology Board, Divisional Commissioner Momin Agha inaugurated the e-stamping system during a seminar held at TMA Hall Lyallpur Complex for the awareness of the system.
The commissioner, while congratulated the authorities for successfully launching the e-stamp paper system, said that the Punjab govt believed in utmost transparency and public facilitation and this system would yield good impact on public facilitation by reducing the first step of passing of challan 32-A.
He said that government had introduced e-stamping system after Land Record Management & Information System as revolutionary steps for ensuring transparency and elimination of fraud and forgery in the use of stamp paper.
He said that there was no process or system available for the verification of the stamp papers being genuine or fake, consequently the govt was suffering a huge revenue loss in this regard and now genuine stamp papers would be used after paying the relevant fees through this system.
He directed the revenue staff to guide the citizens about the e-stamping system for its success.
DCO Salman Ghani said that e-stamping system would be proved beneficial for eliminating the mafia making fraud by issuing stamp papers and the people would feel easy with regard to depositing the stamp paper fees electronically.
Talking about the salient feature of the e-stamping system, he said that stamp papers seeker would require to access the system online for generating challan 32-A.
He assured that the entire team of Revenue Department would work efficiently to make the system is success.
PITB DG Sajid Latif said that e-stamping system was successfully being run in Gujranwala Division and now it has been started in Faisalabad division in 2nd phase.
He informed that the traditionally stamp papers were issued by the treasury office and this manual processing practice involved intervention of various departments which caused delay in verification of challan forms and issuance of stamp papers besides incidents of fraud and forgery.
He said that now the citizens can generate challan Form 32-A by providing information on the web-based system, after this citizen would go to any branch of Bank of Punjab and the Bank will print the e-stamp paper after payment of stamp duty.
He claimed that the e-stamp paper could be verified either through the web or SMS.
He said that after the utilisation of the stamp papers, the data base would mark a red strike against the people which would restrict reuse of same stamp paper.

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