We all know that Karachi is probably the worst place to live in if you own an expensive mobile phone. Really bad choice that. Karachi is widely touted to be the real estate capital of the country. But that title is now under threat from both Lahore and Islamabad. Despite having taken a huge hit over the past couple of years, the city’s real estate market still has some life left in it, but maybe not for long.
According to data provided by Zameen.com – which is Pakistan’s largest real estate portal – recent trends show that investors no longer consider Karachi their first, or even second choice for that matter, when it comes to making investment decisions. This is specifically true when it comes to buying a house. But if it is real estate – specifically residential land – you want to buy, if you invest in Karachi, you still cannot go wrong. But even here, Karachi is losing ground – literally.
Lahore is now the first choice for real estate investors, with Islamabad a close second. According to Zameen.com search trends, in the first half of 2012, there were 2.2 million searches for real estate in Lahore followed closely by Islamabad at 2.1 million. Karachi was a distant third at just 1.5 million searches. The monthly trend gives no real indication that this slide is likely to reverse in the near future.
In fact, Rawalpindi, because of its proximity to Islamabad, is up at fourth and has been holding steady or making marginal gains in the first half of this year.
If we break this up, then Lahore is the clear cut leader when it comes to the ideal location for living or buying land for investment. Islamabad is the second target for real estate investors, but still behind Karachi as a choice for residence.
According to the zameen.com data, for land, it is just DHA Phase VIII in Karachi which is still a major draw, and that too because now people are able to take possession of land for construction. Without this saviour, Karachi would have been even further behind. Phase VIII is larger than the rest of DHA combined, so it has the potential to affect trends. Surprisingly enough, number two on the list is not Clifton, but Gulshan-e-Iqbal.
This perhaps is the main reason why Karachi is falling back: the lack of good choices for investors. Gulistan-e-Jauhar was supposed to become the next big thing, offering affordable accommodation, but security issues have stunted growth. Lahore has several prime zones like DHA Bahria Town, Gulberg, Wapda Town, Cantt, and Johar Town. Islamabad has areas like DHA, Bahria Town, G-13, E-11 amd G-11 among others.
There is one thing one can say for Karachi. It is tough. Despite all the security and law and order issues and the crime and the scarcity of water – all the things that investors consider when making choices – the flow of investment has slowed down, but hasn’t dried up. The interest is there, and, according to property dealers, it won’t take more than a few months of sustained peace before Karachi will once again become a big draw for buyers. The question is, will there be peace?
Published in The Express Tribune, October 8th, 2012.