LAHORE:
Being a real estate agent in Lahore, Azeem like many others peers invested in the one of the most sought after housing society in the city. News of the mastermind behind the project Malik Riaz being caught up in a national level scandal has witnessed prices of the society plummet and create a panic among real estate agents.
“I have not only invested my savings in this scheme, but also money of my investors,” said Azeem.
The society has been doing well for some years and was providing a big relief to the real estate market of Lahore but the scandal is reversing the land price and putting our investments in jeopardy.
Malik Riaz, one of Pakistan’s most high-profile businessmen, has alleged that Arsalan Iftikhar, son of Chief Justice Iftikhar Chaudhry, took almost $3.6 million from him in exchange for favourable verdicts in cases involving Riaz’s businesses. The case is still under trial at the Supreme Court.
Prices of a 605-square yard plot have declined up to Rs200,000 in the last few days, agents told The Express Tribune.
There was a time when the real estate developments in Lahore were based purely on providing housing units, with little regard for any other facilities. The military-owned Defence Housing Authority began offering a few improvements in infrastructure but the trend did not catch on until the late 1990s, when Bahria Town began offering ‘lifestyle real estate’. From then on, a trend started that has continued since.
Other than this, another boom to the real estate market was the migration of people from across the province looking for a save-haven against the rise in criminal activities.
Bahria Town is the second largest housing society after Defence Housing Authority in Lahore, however, the property magnate backed-society has become the preferred choice due to its unique and international living standards.
Prices of land and houses have been stagnant in DHA while Bahria Town prices have declined. Majority of the growing middle class is investing in Bahria Town as it is much cheaper and provides more facilities than DHA.
The day the saga hit all news channels, investors panicked and started selling, even at prices lower than the market going rate, said property expert Shahreyar Ashraf while warning that this is just the start.
The son of Malik Riaz, Ali Riaz, in a statement recently announced that he is handling Bahria Town affairs, but this was not enough to lift investor confidence, Ashraf added. The real estate market is volatile to news flows.
Investors fearing the worst have started shifting their investment to other societies.
Property investors operating at a large scale have the option to divert their investment but we can’t, said Azeem. We can just pray and hope for the best, he added.
Published In The Express Tribune, June 17th, 2012.
COMMENTS (24)
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what will happen to people who already owns some land or are living there?
Prices were already forcefully inflated by speculators , so lt is natural to go down , wait and see. Ali Rriaz may not be competent but team is not bad . Keep in mind the property owners are people , so it will not go down as some people think. hope for the best . Buy only the plot on ground with possession . , careful about files.
Is this a planted news as well? So people will start investing more in Bahria and help the Tycoon? :)
can someone please let us know what are property values in major pakistani cities? What would be upscale neighbourhood prices in Lahore/Islamabad/Karachi/rawalpindi be? Say for a 2000 sq ft apartment and also for a 300 sq yd plot?
What is the price of 500 yards plot in Bahria town phase 3 and 4????.
I am interested in selling my plots of bahrai town...
@Raj and @Hunter Punter: It is not that prices for 605sq yards plot has come to Rs. 200,000; the writer meant there has been decrease of Rs. 200000 per plot, meaning if it was for 5 million (approx price), it has come down to 4.8 million.
prices in Pakistan are already INFLATED .... the property business is being done in hardly 15 - 20 Communities and 90% of people who are buying and selling are INVESTORS.
I would say the prices should go down another 500,000 Rs to come to actual value
You can now get a villa in Bahria Town for 1 million. But no takers. I am waiting for the price to come down to 100,000. Then, I will buy.
This time it may not be managed decline in price but Bahrai does it premeditatedly to pick the titles back at low levels as they have deep pocket. When they collect back enough the storm is over and they sell it at high prices and we common people follow their plans like idiots. Same happens in most the stock markets specially in developing world where regulators are corrupt and incompetent to cath the white collar thieves.
Hawwww! 200k "decline" is a drop in the bucket, compared to the original landholders who got a pittance at best or nothing at all as they were forced of their land!
@Hunter Punter: The prices declined by 200,000 not that the land was worth 200,000. For 200,000 you won't be able to buy even a one bedroom flat in a poor locality.
a 605 yd plot in london comes for about 5 million pounds.... 200000/- is dirt cheap. unless the price quoted is wrong. surely in lahore, prices of prime property must be far more than that.
@Raj: The report nowhere indicates the price of the 605 yard plot , what it states that the price has declined by 2 lacs .
@Ajamal: Behavioural Finance sure had some concepts that were relevant. The market react to such news which is normal.
@Raj: It meant 'up to' 200k which does not give clear picture of how much the price of this will be. Islamabad has one of the expensive most properties so the story is same about people spending their life saving up except for a very little percentage.
After what all appeared on media, how can one be sure that the article above is not a paid article by the Bahria town competitors?
Another knee jert reaction by our people. When will be learn to keep personal and corporate affairs separate? In the worst scenario, an independent board can be appointed by Supreme Court to run the affairs of Bahrai to protect billions of inidviduals investment.
Prices of a 605-square yard plot have declined up to Rs200,000 in the last few days, agents told The Express Tribune.
I must say Pakistanis are very lucky to get such large chunk of plots at such cheap rates that too in one of the major cities like Lahore. In India to get even 200 sq yd of land in any of the metros , one has to spend all his life time savings and also may need to take a loan on top of that. Then there are some neighbourhoods where middle class people can't even think of buying appartments let alone plots
so wht does this report suggests??? proceedings against riaz thekedaar is hurting public interest??
Buy the fear. Good time to buy. - investor
This was just artifical boom created by the Bahri itself through bulk agents/investors, even a 5marla plot was asking at 3-4 lack own. Now this nut is cracking & prices r declining to the actual value.