House is a place in which one can reside with comfort. Most of the times, it keeps you safe from unfriendly natural conditions such as bad weather, rain, excessive heat, storms and other natural disasters. To stay safe and to live peacefully, a house can be said to be an essential need. Various trends follow the housing sector such as designing and outlook of the house.
Population trends of Pakistan have been on the increase since the time the country has come in-to existence, often growth rates reaching to be one of the highest in the region. This has created a housing shortage in the country especially in the urban cities such as Lahore, Islamabad, Faisalabad, Karachi, Peshawar etc. In short, the population to be housed creates the demand for housing. As the population grows, the demand for housing grows. On one hand, real estate is considered among one of the safest investments, on the other hand, this market has been diversified to a great extent increasing doubts in the minds of purchasers. If you wish to see, whether you’re better off by selling, buying or staying put, here are the 2019 housing trends you need to know to get to the answer;
Home prices are rising
Based on data from last year, many predicted that the price of houses would continue to rise in the year 2019. There are eager buyers in the market of real estate, in-fact many of them looking for newly built houses. The research revealed that, in the first four months of 2019, buyers were paying more for resold houses than a year before. New home construction is projected to increase by 8% in 2019 and that year-end prices will be 2.2% higher than at the end of 2018. It has been predicted that prices for existing homes will rise up to 4.3% at the end of this year.
More homes for sale
If there are more buyers than a number of houses for sale, it gives sellers a stronger negotiating position (hence it is called to be the seller’s market). Today, in the real estate sector, there are more sellers than buyers in the market, which has created excess supply (hence it is called to be buyer’s market at this time). This gives buyers more negotiating power in the deal. Only in Lahore, One hundred and fifty-six housing societies are operating, to fill the gap of the housing shortage. As there are more homes available for sale now, so buyers have a greater choice. The balance of power is slowly shifting in the buyer’s favour.
The table below summarizes the supply under each competent authority by giving a list of Cooperative Housing Societies in Punjab, and the number of available plots;
|Cooperative Housing Societies||
|Lahore Development Authority (LDA)||
|Housing and Urban Development Department||
|Private Housing Schemes||
|Lahore Improvement Trust (LIT)||
Mortgage Interest Rates will rise
Mortgage interest rates are rising after years. It has been predicted that interest rates will increase to an average of 5% for a 30-year mortgage and 4.4% for a 15-year mortgage. Since seven years, mortgage interest rates have been rising in this trend. Continuous increase in interest rates indicates that more people are willing to spend and borrow.
In a nutshell, the mortgage is a big commitment. Higher interest rates will make many buyers think twice before going for that option. In case, you’re not buying on cash, be smart and go for a conventional 15-year fixed-rate mortgage. That way, you know exactly what your payment will be over the life of the loan. In addition to this, consult a trusted real estate consultant who understands the current market. They’ll help you set expectations for how much you can make, and how long you’ll have to wait for the right offer.
Inventory is improving, but with low pace
Recent data suggests that the supply of houses is rising, but it is still not enough to satisfy the huge demand. According to the analysis of the real estate marketplace, starter home inventory was up 3.5% last quarter. In the majority of markets, the number of homes being put on the market or newly constructed has increased slightly, while the pace of sales has slowed slightly. This has stopped the inventory decline. While the situation is not getting worse for buyers, it’s also not improving notably in the majority of markets. The wave of first-time homebuyer demand will be met by somewhat higher inventory levels than in 2018.
Innovation in building structures is a game-changer:
The Real Estate industry has been greatly changed by technological advances. Successful developers are listening to the needs and want of the marketplace. They are in and adapting to changes in technology. Smart building technology is becoming the norm, and consumers want greater productivity and reduced costs that this type of building promises. The innovation of technology seems to be touching a multitude of points within the industry and will continue to do so. On the other hand, consumers are also insisting on resource-efficient structures.