Trump’s executive order adding to interest in Pakistan’s property market

[Zibago]

Trump’s executive order adding to interest in Pakistan’s property market
By Creative: Talha Khan / Farhan Zaheer
Published: February 5, 2017
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KARACHI: The travel ban imposed by the Donald Trump administration on citizens of seven Muslim-majority nations has sent shock waves around the world. Within the US, the administration argues that his executive order is meant to protect the country.

But thousands of kilometres away, its impact is not just being felt on travellers.

Pakistan’s property market is also feeling the effect, but in a rather contrasting way. Real estate dealers say fearful Pakistani-Americans have started to think about contingencies, including buying properties back home.

Although Pakistan is not mentioned in the executive order, the community living in the US fears there could be some kind of fallout on people originating from Pakistan as well.

“Trump’s ban on seven Muslim-majority nations is a mini 9/11 for Americans originating from Pakistan,” CITI Associates CEO Muhammad Shafi Jakvani said, referring to any fallout that could envelope Muslims from Pakistan as well.

Market participants say Pakistani-Americans have started taking a renewed interest in the country’s property market ever since the US elections. However, the bigger shock for the community was Trump’s recent action against the seven Muslim-majority nations.

“His order has fueled the fire. The situation is extremely concerning for Pakistani-Americans and this will definitely increase their pace of sending money to Pakistan,” he added.

Jakvani, a Karachi-based property dealer, believes Trump’s actions have suddenly changed the outlook of Pakistani property markets for 2017.

“Pakistani community fears the Trump administration could add Pakistan to the list. Therefore, property markets are all set to go north because Pakistani-origin families believe the intolerance against Muslims will only rise and they may need a second alternative,” he said.

Analysts say Pakistani-Americans do not just buy properties for the purpose of living in them, but also use it as a safe-haven asset to increase wealth. Real estate in Pakistan has given massive returns over the years and a stable security situation has only added to its growth. Population growth, a shortage of housing units and rising disposable income along with falling interest rates have been key triggers for the real estate sector.

Dealers in Karachi say Pakistani-Americans have invested heavily in Bahria Town, Karachi as well as other properties in the commercial hub of Pakistan. The main reason of these new investments was the improving security situation in the biggest metropolis of the country.

“There is fear among every Muslim community living in the US, but Pakistanis are especially apprehensive. Pakistanis that are on work visa or green card holders are so fearful that they have even stopped taking domestic flights in the US,” commented a Pakistani green card holder on condition of anonymity.

Real estate agents say Pakistani property market got a boost on two occasions. One was right after 9/11 and the second one came when a large number of Pakistani-Americans returned due to job losses during the financial crisis of 2007-08.

But the impact of 9/11 was by far much greater than any influx of overseas Pakistanis from the Western countries.

“I have received numerous frantic calls from Pakistani-Americans who are extremely concerned about the current situation. If Pakistanis move back, they will definitely buy properties here,” another real estate dealer Younus Rizvi commented.

Pakistanis form the seventh largest immigrant population in the US. About 0.7-1 million Pakistani immigrants live in the US, according to US data. This is the fourth largest Pakistani diaspora after Saudi Arabia (2.2 million), the UAE (1.2 million) and the UK (1.1 million) in the world.

“Looking at the conversations I have had with Pakistani-Americans recently, I am sure Pakistani-Americans will buy more property in Pakistan in coming months,” added Rizvi.
https://tribune.com.pk/story/131784...er-adding-interest-pakistans-property-market/
@django @The Sandman @Moonlight @Mugwop @Hell hound @WAJsal @unleashed @PaklovesTurkiye

 

[خره مينه لګته وي]

KARACHI : The travel ban imposed by the Donald Trump administration on citizens of seven Muslim-majority nations has sent shock waves around the world. Within the US, the administration argues that his executive order is meant to protect the country.


But thousands of kilometres away, its impact is not just being felt on travellers.

Pakistan’s property market is also feeling the effect, but in a rather contrasting way. Real estate dealers say fearful Pakistani-Americans have started to think about contingencies, including buying properties back home.

Real estate sector set to go north on back of CPEC, Trump

Although Pakistan is not mentioned in the executive order, the community living in the US fears there could be some kind of fallout on people originating from Pakistan as well.

“Trump’s ban on seven Muslim-majority nations is a mini 9/11 for Americans originating from Pakistan,” CITI Associates CEO Muhammad Shafi Jakvani said, referring to any fallout that could envelope Muslims from Pakistan as well.

Market participants say Pakistani-Americans have started taking a renewed interest in the country’s property market ever since the US elections. However, the bigger shock for the community was Trump’s recent action against the seven Muslim-majority nations.

“His order has fueled the fire. The situation is extremely concerning for Pakistani-Americans and this will definitely increase their pace of sending money to Pakistan,” he added.

Jakvani, a Karachi-based property dealer, believes Trump’s actions have suddenly changed the outlook of Pakistani property markets for 2017.

“Pakistani community fears the Trump administration could add Pakistan to the list. Therefore, property markets are all set to go north because Pakistani-origin families believe the intolerance against Muslims will only rise and they may need a second alternative,” he said.

Analysts say Pakistani-Americans do not just buy properties for the purpose of living in them, but also use it as a safe-haven asset to increase wealth. Real estate in Pakistan has given massive returns over the years and a stable security situation has only added to its growth. Population growth, a shortage of housing units and rising disposable income along with falling interest rates have been key triggers for the real estate sector.

From Dubai back to Pakistan: the real estate investors’ journey

Dealers in Karachi say Pakistani-Americans have invested heavily in Bahria Town, Karachi as well as other properties in the commercial hub of Pakistan. The main reason of these new investments was the improving security situation in the biggest metropolis of the country.

“There is fear among every Muslim community living in the US, but Pakistanis are especially apprehensive. Pakistanis that are on work visa or green card holders are so fearful that they have even stopped taking domestic flights in the US,” commented a Pakistani green card holder on condition of anonymity.

Real estate agents say Pakistani property market got a boost on two occasions. One was right after 9/11 and the second one came when a large number of Pakistani-Americans returned due to job losses during the financial crisis of 2007-08.

But the impact of 9/11 was by far much greater than any influx of overseas Pakistanis from the Western countries.

“I have received numerous frantic calls from Pakistani-Americans who are extremely concerned about the current situation. If Pakistanis move back, they will definitely buy properties here,” another real estate dealer Younus Rizvi commented.

Pakistanis form the seventh largest immigrant population in the US. About 0.7-1 million Pakistani immigrants live in the US, according to US data. This is the fourth largest Pakistani diaspora after Saudi Arabia (2.2 million), the UAE (1.2 million) and the UK (1.1 million) in the world.

“Looking at the conversations I have had with Pakistani-Americans recently, I am sure Pakistani-Americans will buy more property in Pakistan in coming months,” added Rizvi.



Published in The Express Tribune, February 6th, 2017.

 

[Max Pain]

This could be a blessing in disguise if some BIG shot Pakistanis in US industry tend to invest in Pakistan,
might create more jobs and investments that we need

 

[VCheng]

Such a sudden influx of money from abroad only prices the local buyers out of the market.

 

[I S I]

Such a sudden influx of money from abroad only prices the local buyers out of the market.

Always negative. Is your blood group 'O Negative'?

 

[NakedLunch]

Hopefully it will convince a few Pakistanis to come back home. Like a reverse brain drain. There are some very educated Pakistanis in the US.

 

[MultaniGuy]

Hopefully it will convince a few Pakistanis to come back home. Like a reverse brain drain. There are some very educated Pakistanis in the US.

I dare say put Pakistan on the blacklist.
Please send the expatriate Pakistanis back home.

 

[VCheng]

There is nothing negative in what I have said. Perhaps people should peek out of the lota they are living in by choice and see what is happening in the real world:

https://www.theguardian.com/cities/...ity-racism-meets-real-estate-british-columbia

Race and real estate: how hot Chinese money is making Vancouver unlivable
After Canada’s ugly episode of racism in the early 20th century, Vancouverites feel uneasy talking about how this beautiful but unassuming city became one of the world’s least affordable: an unprecedented flood of capital from China

"Here’s one,” says Melissa Fong. She’s browsing online real estate listings in a cafe near Vancouver’s City Hall. Behind her, the mountains of the North Shore – the view that launched a thousand bidding wars – rise through mist. “Three-bedroom townhouse, 1,400 sq ft, C$1.5m (£800,000). You could start a family in a place like this. Way, way out of my price range, though.”

Fong moves on, scrolling through half a dozen homes, each smaller than the last, until she arrives at a tiny, 500 sq ft condominium on the east side of the city. “Unassuming” would be a generous way to describe how it looks from the photos, which, tellingly, are all exterior shots. “You could live there if you only had one kid, right?” she says with a grim smile.

An urban planning researcher, Fong divides her time between Vancouver, where her elderly parents live, and Toronto, where she’s finishing a doctorate. She grew up in Vancouver, has deep roots in the city, and plans to settle here with her husband, a home renovator. But she has looked on with a mixture of frustration and horror as the cost of housing in Canada’s famously liveable city rise beyond the means of young professionals like her.

“When you think it can’t get any worse, it does. So you keep adjusting your expectations, you know?”

Over the past year, the price of a single family house in Vancouver increased by an incredible 30%, to an average of $1.4m. It’s just the latest, most dramatic jump in an already dramatic long-term trend that has turned the beautiful but unassuming Canadian city into one of the world’s least affordable, with a housing price-to-income ratio of 10.8. That’s third after Hong Kong and Sydney, and well ahead of London, which ranks eighth at 8.5.



The average single family home in Vancouver costs C$1.4m. Photograph: Jimmy Jeong/Reuters
Driving the rise is an unprecedented flood of foreign capital, mainly from China. “What you have is a huge pool of very wealthy people who want to hedge against uncertainty back home,” says Thomas Davidoff, a real estate economist at the University of British Columbia (UBC). “Combine anxious money – a lot of it – with a beautiful gateway city that has limited space to build, low property taxes, lax regulation on capital flows, and wealth-friendly immigration programmes, and you get a market like this one,” – a market where an ordinary house with a waterfront view can sell for $15m while people earning local wages struggle to buy or rent a home.

In spite of spiking inequality, policymakers have been slow to acknowledge the problem of foreign capital. Public debate about Vancouver’s affordability crisis has, until recently, been surprisingly circumspect – due in no small part to a very Canadian discomfort with talking about race.

Housing Action for Local Taxpayers, a local advocacy group. “[The crisis] is a policy issue, it’s a social justice issue, and up until now, everyone is saying, ‘We’re nice, we can’t talk about this.’ Well, if you can’t even talk about where the money is coming from, you can’t do anything about it.”



A mansion under construction in a Vancouver neighbourhood popular with Chinese buyers. Photograph: Reuters
Canada has long targeted “anxious” money from Asia. Right now, if you invest a five-year, interest-free amount of $800,000, you can effectively buy citizenship. (By contrast, a similar scheme in Britain, the Immigrant Investor Programme, offers citizenship for between £2m and £10m.) Such programmes have driven the globalisation of Vancouver’s real estate market. They were created in the 1980s with Hong Kong’s elite in mind: millionaires arrived by the thousands from Hong Kong ahead of the 1997 handover to China, and there was tension in Vancouver then, too.

What’s different about the current wave of wealth migration is the scale and speed of it. “Hong Kong is a small territory,” Ley says. “With China you have an amazing depth of capital – capital which is more and more eager to leave the country.”

That capital is turning Vancouver into a resort town for the wealthy. Heritage homes are being knocked down and replaced with mega-mansions. Teenagers drive quarter-million-dollar Lamborghinis. Nowhere is the fascination, scorn and exaggeration to which these gaudy lifestyles of the Asian nouveau riches are subject better exemplified than in Ultra Rich Asian Girls of Vancouver. The reality TV show follows the daughters of elite Chinese families as they float through a Vancouver that would be unrecognisable to most Vancouverites – including, probably, some of the ultra-rich the show purports to represent.

“From a western perspective, maybe there’s a certain crassness,” says Sonny Wong, a marketer who advises wealthy newcomers. “I had a chicken farmer from southern China come to my office. His income the previous year was US$100m. He doesn’t have a university education. Ultimately, though, he just wants to do well for himself and his family. So what do you do when you move to a new country? You buy a car and a house. And a $5m house and a Maserati are within his means. If you can afford it, that’s what you buy.”

What matters isn’t that wealthy people are immigrating to Vancouver from China, or anywhere else, really. It’s that they continue to earn the vast bulk of their wealth outside of Canada and they use that wealth to invest in Vancouver real estate. As a result, housing prices have decoupled from the labour market, putting people who earn local wages at a major disadvantage. Research by Ley and other academics shows a clear link between global wealth migration and local affordability.



Customers in Vancouver queue for a release of vintage Bordeaux. Photograph: Reuters
While some economic migrants do start businesses here, the problem with Canada’s cash-for-citizenship programme is that it doesn’t encourage long-term investment or entrepreneurship beyond the initial outlay of money. Millionaire migrants might as well establish their families in Vancouver and continue to build their fortunes in China – and they do. A study by the Canadian government shows that, 10 years after arriving in the country, immigrants who used the investor programme declared marginal incomes, and paid only a fifth as much income tax as other Canadians.

Understandably, this outrages people. “If someone wants to live here, they shouldn’t just be parking a family here and earning all their money elsewhere,” says Raymond Wong, an engineer who grew up in east Vancouver, a traditionally working class part of the city that has seen prices skyrocket. “They should be contributing to the economy, putting down roots, fitting into the culture.”

online petition to strengthen Canada’s notoriously lax federal anti-money laundering measures. It has attracted more than 10,000 signatures.

While such frustrations are unquestionably legitimate and stronger regulation is badly needed, the narrative of “putting down roots” makes some people uneasy. Melissa Fong supports affordability measures, but worries that talk of roots raises the spectre of a more insidious form of racism: respectability politics. “It’s the old question of what is a ‘good’ Chinese?” she says.

Ian Young, author of the South China Morning Post’s enormously popular Hongcouver blog, the must-read chronicle of Vancouver’s affordability woes, is more sanguine. “When you have thousands of super-rich settling in a new city in very short time, that’s discomfiting … people don’t know what to think,” he says. “But the issue here is [the buyers’] millionaire-ness, not their Chinese-ness. And I think most people get that.”

‘An almost uniquely Vancouver reaction’
And yet, hiding behind an absence of good data, government officials have mostly refused even to admit that foreign capital is making it impossible to buy a house in Vancouver – let alone act to level the playing field, for instance via a progressive property tax.

“I find it astonishing that Hong Kong, Singapore, Sydney, and London all have had right-wing, market-friendly governments which have intervened quite aggressively in trying to address unaffordability, yet nothing has happened here,” Ley says.



Vancouver’s Chinese New Year parade – 30% of people in the city claim Chinese ancestry. Photograph: Ben Nelms/Reuters
The debate is finally shifting, mostly thanks to a controversial study. Last year, Andy Yan, a respected local urban planner and academic, took Vancouver’s most expensive neighbourhoods and looked for buyers in a recent six-month period with non-anglicised Chinese names – that is, names without a “western” first or middle name, a method he and other experts defended as an imperfect but academically sound way of gauging tenure in Canada. Yan found that they accounted for two-thirds of all house purchases.

Several prominent figures in the real estate industry publicly questioned whether the study was racist. So did Vancouver’s mayor, Gregor Robertson. “This can’t be about race, it can’t be about dividing people,” he told the CBC. Some in the Chinese community expressed discomfort with the study as well.

Others, including Yan, were taken aback. “My great-granddad paid the head tax,” he told a local newspaper. “So to somehow use [concerns about] ‘racism’ to protect your privilege? That’s just absurd. This is an almost uniquely Vancouver reaction.”

Indeed, there is profit to be had by capitalising on people’s discomfort around race. Young sees a willingness on the part of politicians and the real estate industry, faced with the prospect of unpalatable policy decisions, to maintain the status quo. “There are a lot of vested interests here,” he says. “To red-flag the entire conversation as racist, I find that disturbing. This is the most profound social justice issue in Vancouver today.”

Suddenly, people were talking. Eveline Xia, a 29-year-old activist, started #donthave1million, a Twitter campaign to protest the exclusion of the middle class – especially young professionals – from the housing market. People from across Vancouver tweeted photos of themselves holding placards with their ages (usually 20s or 30s), level of education (usually high), and the #donthave1million hashtag. The campaign inspired a series of protests and meetings, that, with Yan’s study and Young’s reporting, seem to have changed the trajectory of the affordability debate.

This month, Prime Minister Justin Trudeau finally went on record as saying overseas money is “obviously” a factor. Mayor Robertson spoke out in favour of a tax on absentee owners, something that 80% of Vancouverites support.

Yet Young doubts that taxes alone will solve the problem. “People shouldn’t see them as an affordability buster. The desire to get money out of China is so strong and so profound that even those penalties being proposed likely won’t make that much of a difference,” he says.

Close the dysfunctional and highly politicised cash-for-citizenship scheme, experts say. But no one expects that to happen soon.

Residents Claire Immega and Peter Harvie don’t. For them, the damage has been done, and they’re adapting by building their own house … in Immega’s mother’s backyard.

“The only reason it’s even an option,” says Immega, looking out from the window of her childhood home at a 25ft hedge that will have to be cleared, “is because my mother has lived in here for the past 20 years.”

Immega, a lawyer, and Harvie, a property manager, face the same choice as all young professionals in Vancouver: adapt or leave. Some choose to rent with friends. Some move home with family. Others, like Immega and Harvie, opt for “laneway homes”, an in-between measure, trading flexibility in exchange for affordability and a nicer neighbourhood. A whole sub-industry dedicated to laneway homes has sprung up.

The couple won’t ever be able to sell their house unless Immega’s mother buys them out. Nor can they build up if they start a family, thanks to strict zoning rules. Even so, they say, they’re luckier than many.

“For most of our friends, it’s take on a huge mortgage – if they can afford one – pay expensive rents for ever, or move away. A lot are moving away.”

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[NakedLunch]

I dare say put Pakistan on the blacklist.
Please send the expatriate Pakistanis back home.

I hope not yar. People sholdnt have to run from wherever it is they call home. But in a bad situation that would be a good outcome.