The abnormal hype of the real estate market is artificial and has reached absolutely unrealistic proportions, leading to the inevitable collapse. The current market is unfortunately saturated with so many projects that traditional investors can be easily confused and are left unable to distinguish between the lost projects and great opportunities that can be availed in this slump.
Due to the nature of this confusion, investors have become insecure and it has led to this decline in activity of the market. These observations were made by Imtiaz Rafi Butt, a leading pioneer concerning real estate for almost three decades, in a chat with media here.
"There has always been a balance between residential and commercial property. Look! We have to be realistic; the hype that originally caused such chaos in the market was almost completely caused by the suburban land and then flowed into semi-commercial, commercial land, missing commercial plazas all together."
Pure land prices have skyrocketed exponentially to a point where today there are no buyers and no equilibrium point between supply, demand and prices. Although today, one can see that commercial built-up property is still under valued, he added. After the dust from the real estate storm settles, active commercial plazas will become the logical facets of real estate growth and revival, he pointed out.
Answering a question about traditional investors in real estate who have been left with losses after the collapse, he said: "One thing has to be realised that traditional investors always tend to stay near real estate due to familiarity with the business, like I said before that when the dust settles, the commercial property will jump straight into the limelight".
To a question about revival of real estate business, he said, "It is common sense to invest in commercial property now despite its being undervalued". A wise investor always seeks activity within a commercial project because that is truly the heart and soul of a commercial project. Location is extremely important but activity is the crucial difference between a dead investment and a thriving one.
"In my experience investors who buy shops don't know exactly what to do with them, because of the lack of activity they don't see proper returns on their investments until many years if ever.
When I realised the scope of this problem and the negative effect it has on the market as a whole, the way was clear, instead of going on and keep constructing new projects, Rafi Group took a brave turn by gearing its entire infrastructure into value added property.
The group rigorously invested into creating activity in its current projects, such as Defence Shopping Mall which has a brilliantly innovative anchor department/super store by the name of new TesMart, creating unprecedented activity in a new project in just one year."
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