The 2005 Kashmir Earthquake has completely destroyed the town of Balakot. As a consequence the site of Balakot town has been declared as a red zone and for resettlement new Balakot town was proposed at Bakryal. There is uncertainty about the resettlement. The new Balakot town attract the low income and servant class of the old Balakot town for residential purposes. However, the politicians, businessmen and landlords of the community are fear to suffer. As a result, these groups resist the process of resettlement. This uncertainty about the resettlement is the product of human interaction with the site and situation of new Balakot town in post 2005 Kashmir earthquake scenario. The site is feasible while situation is not encouraging in the new Balakot town, which creates uncertainty about the future of new Balakot town. This paper attempts to carry out the analysis of site, situation and their impact on resettlement of proposed new Balakot town, Pakistan. The site analysis provides details of vulnerability to hazards, civic utilities and services. The new Balakot is a planned town and have low vulnerability to seismic hazards. The situation analysis explores the potential growth and development of the new town which is measured in term of economic base. The potential basic and non-basic activities structure is analysed for the study of economic base of new Balakot town. The basic activities infrastructure is not attractive for the residents of the Balakot town as there are least business and other employment opportunities. It was found that initially the property business and high level of non-basic activities and later on the basic activities will support the growth and development of this new town.