Uncertainty and nervousness are currently gripping the global financial markets. Many property investors in the Lahore are wondering whether to buy property in the Lahore at all in the current economic climate.
But are we really on the verge of the property market crashing down around us?
This article will explore what's currently happening in the financial market and whether now is the wrong time to be buying property in the Lahore. Its goals are that after reading it you will have a much better understanding of the current financial climate and how you can still make money in it.
What's happening in the financial markets around the World?
The speed and the depth of reach of the fallout from the subprime financial crisis in the States have taken many investors and financial organizations by surprise. Many people knew that the stability of the US economy had far-reaching implications for the rest of the World, but just how far, is only just becoming apparent.
There has been a panic amongst lenders in the Lahore and a reluctance to really admit how hard they have been hit. Banks are becoming suspicious of each other and we are in a situation where they are no longer lending to each other as freely as they used to.
All the big banks and lending organizations appear to have been hit heavily. Some of them are now admitting it openly and asking for help from shareholders while others are determined to try and put a brave face on and try to brave it alone.
One thing that has become clear is that many financial organizations seem to have been run with very little financial savvy. Criteria that have been set in the past for lending purposes seem to have gone out the window and one has to ask oneself, on what basis were they set in the first place?
On the whole, 100% plus mortgages seem to have been abandoned. Big players in the buy to let mortgage market, such as Mortgage Express, have pulled key products, such as their same day remortgage product and are now insisting investors have had their property for at least 6 months before being allowed to remortgage.
Many property investors are now finding it difficult to get mortgages at rates that make purchasing property financially viable.
Surveyors seem to be running around like headless chickens, not really having a clue how to value properties in the current climate. While they were confident of their valuations in a more stable market, bring in a little instability and their valuations seem to be on shaky ground, with each surveyor looking over his shoulder and being scared to overvalue properties, hence many times undervaluing them.
Off plan property investors are being especially hard hit since surveyors are being particularly caution with anything that it is difficult to get comparable for. Properties that were bought off plan 18 months ago are now coming to completion and are not worth what they were projected to be worth.
The lending World has shown how fragile it actually is and the truth has been laid bare for all to see.
Should we stop buying property in the Lahore altogether?
Good question. And with the speculation of a Lahore property market crash, it is a question that many investors are asking. However, experienced property investors, have seen similar things before, and because of this, they don't get caught up in the endless speculation of what's happening in the property market. They know that if they can buy below market value property in a given location based on local affordability and a good rental yield, then they will be fine.
They are confident that if they can buy these properties for around 4 times, or less, of what the local average salary is and they can manage to get a reasonable rental yield, then long term they are onto a winner.
However, if you are looking at buying in areas where the property prices are 7-10 times the local affordability then you are potentially on shaky ground.
These are great learning times for the positive thinking Lahore property investor. For the next few years, you probably won't be able to complacently buy a property anywhere in the country and just expect it to rise in value. Now, is the time when you have to learn your craft properly? It's time to go back to school.
For the investors that understand the property and financial markets, and learn how to work with them in any and all conditions, then the next few years promise to be times of learning and expansion, not contraction. Yes, there are difficult times ahead, but out of huge challenges can come tremendous growth.
About the Author:
Do you want to learn more about making money from property in the Lahore? Whether it be property investing, developing, trading or any other aspect of investing in property in the Lahore or abroad, visit the www.ghanimarketing.com website for expert tips and advice.