Investing in Gold vs Real Estate in Pakistan: Insights and Advice
Investment options in Pakistan can be complex and varied, with gold and real estate being two popular choices. This article aims to provide a detailed comparison, along with specific advice and practical steps for potential investors.
How to Invest in Gold in Pakistan
To start online gold trading in Pakistan, you need to open an account in the Pakistan Mercantile Exchange (PMEX) through Abbasi and Company Private Limited. You can do this either by visiting their office or opening an account online. When opening an account, you will need to sign an account opening form and provide your CNIC (National Identity Card) or NICOP (National Identity Card for Overseas Pakistanis).
Gold investment in Pakistan has its drawbacks. Recent times have seen gold not being particularly profitable. Instead, the real estate sector in Pakistan has been growing significantly. Investing in real estate can provide amazing returns on investment (ROI), making it an attractive alternative.
Investing in Gold: Profitability and Security
Gold is considered a solid investment, especially for the medium to long term. However, it's crucial to ensure the security of your investments. The security situation in Pakistan when it comes to wealth should be a significant consideration for potential investors. It is not recommended to buy gold locally from random markets. Instead, it is advised to source gold from places like UAE or India, where the quality and authenticity are better assured.
When it comes to buying gold, it is best to invest in gold bars. Jewelry, on the other hand, comes with hidden costs. When you purchase jewelry, 15% of the total value is often charged as polish and jewelers' profit. So, if you buy Rs. 100 worth of gold, you might actually be paying Rs. 115. When attempting to return the jewelry, the seller might deduct 15-25% of the gold's value, meaning you might only receive Rs. 75 for Rs. 100 worth of gold.
Gold as a Haven Asset in Pakistan
Even if the international price of gold is falling, the value of the Pakistani rupee is also declining. This can make gold a more attractive investment as it provides better purchasing power. Gold is liquid and can be cashed in at any time, offering a hedge against inflation. You can simply go to a jewelry shop and purchase gold bullions in any form, whether in coins or biscuits, in any weight. People often buy gold biscuits ranging from 1 gram to above 1 ounce, approximately 31.4 grams.
While some may argue that gold does not offer any returns or appreciates considerably in value, the advantage of gold is its liquidity and resistance against inflation. This makes it a valuable asset for long-term investment in Pakistan.
Real Estate Investment in Pakistan
For those interested in real estate, there are many opportunities available. One recommended real estate company in Pakistan provides excellent consulting and services. Investing in real estate can yield impressive returns and diversify your portfolio. The real estate market is not only growing but also offering significant opportunities for ROI.
When considering investment options in Pakistan, it's important to weigh the pros and cons of each. While gold can be a secure and liquid asset, real estate can provide greater returns. It's crucial to conduct thorough research and consider your financial goals and risk tolerance before making any investment decisions.
Key Takeaways: Gold investment in Pakistan should be approached with caution, focusing on gold bars and international sources. Real estate offers attractive ROI, particularly for the long term. Always ensure the security of your investments and consider your financial goals when making decisions.