The Real Estate Market always based on long term moves in all over the world. The calculation based on quarterly moves (minimum side). Some time there is volatility in the market and figures changes in few weeks or months. But normally calculate on long term moves.
Real Estate Market in Pakistan
The Real Estate Market in Pakistan also has the same trend of long term moves, in these moves market made the cycle which is based (very interestingly) on decade method. Market moves on decade format and make highs and lows in the same decade, market starts from lowest then touches highest then come again to the lowest level but 2nd lowest level is very much different from the level where market starts the move.
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The Decade Cycle
This decade cycle witnessed in last three decades from 80s to 2010, and now it turned in the fourth decade, and this 4th decade will be completed in 2020 (According to Study). To understand the minimum and maximum price structure one thing should be clear here that in the same decade market start from its bottom and made highest level till the date, and again market come down. It means market moves like wave from down to up then again down. The price level may differ in different decades.
According to this study, Market start moving in the starting of the decade and goes to its peak in almost middle of the decade and create the history by making life time high prices and after touches the peak prices, market touches the lowest price, the interesting part of this cycle is when market touches its lowest price range, the running prices are double or three times from the highest price of last decade. (Not necessarily in every decade).
The highest price falls in the middle of the decade, and make the life time highest price. One more very interesting thing, necessary to mention here that to follow this technical movement and for completing of the cycle, fundamentals are automatically change and support the market moves.
In the movement of one decade market moves in both the directions, upward and downward, it has bullish trend in one session, and the other session has bearish trend. Normally the span one session is 3 to 4 years for bullish and 5 to 6 years for bearish trend. In between these sessions market also have some short term moves for the price adjustment of different areas, but these short terms move could not make any major changes in the prices.
For better understanding of this theory here we are taking an example of 500 square yard plot in Defence Phase VIII. Specifically in the D cutting area which is now very well known area as Zone B of Phase VIII. The availability of plots in this area is almost all plots of 500 square yards. The total number of plots around 1500 plots of 500 square yards each. Plus few are 1000 square yards plot and cutting of staff plots as well. In this category approximately total 1000 plots of 100/120 and 150 square yards. The major stake are of 100 square yards plots, 120 and 150 are very few.
Price in different Decades for 500 Square Yard Plot
- In 1980, moves start in the middle and made the top in 88, and then prices collapsed.
- In 1990, moves start in the 93 and made the top in 96, and then prices collapsed.
- In 2000, start from 2001 and made high in 2005, and then prices collapsed.
- In 2010, start from 2011 and made high in April 2012, and retrace. (Continue)
Currently the market is in the start of decade, almost 2nd year in progress. Prices are almost doubled from the lowest level, in many part of Phase VIII, and after touched this level market took some little correction and now it is in still position, further may it will take some more correction but this is the internal small move of the big movement of the market.
Forecast for the current decade, market starts moving from 2011 and currently market touched highest price level, after touching this level market is in the process of retracing and market retraced 5 to 10 % in different area because of Budget month. According to decade study market will touch its highest price in 2014 /15, or may be little earlier, and the price will touch around 50-Million for same piece of land, if the history repeats itself. (Technically)
The interesting part is that fundamentals are automatically support to complete this move and market touches the level it should mention by chart.
Note: This article is written by Mr. Muhammad Shafi Jakvani, CEO – Citi Associates. Kindly note that this technical study is based on personal research and forecast for the future, and there is no guarantee of market move. Market could move in any direction and with any changes in prices.