As migration to Lahore continues, rents keep on rising

Published: June 23, 2013

"Investing in real estate is the most common way to protect capital as well as earn a hefty monthly rent," F-1 Properties CEO Waseem Tariq. ILLUSTRATION: JAMAL KHURSHID

LAHORE: 

The desire to live in a safe environment and have modern luxuries seems to be one of the key reasons why the real estate market of Punjab’s provincial capital – Lahore – has marched to new highs.

After a consistent increase in recent years, rent of properties and prices of land have hit the peak with more and more investors following the trend to make safe investments and earn regular incomes, say people associated with real estate business.

The rise in house rent is not artificial, neither for the person who is investing his money to construct a house, nor for the family willing to shift to some rented place. There are several reasons behind this phenomenon.

Migration from other areas of the country because of the law and order conditions there, rural people aspiring for a better future for their kids, benefits and opportunities in the urban lifestyle and increasing number of family members are few of the factors.

All these are providing a room for the real estate and construction industry to flourish and it is not looking back.

In a bid to ensure the safety of their families, people are increasingly opting for gated communities. In the city, some real estate developers are providing a mix of luxurious lifestyle and adequate security.

Housing colonies developed by Eden Developers and the Divine Group as well as Askari Housing Schemes are attracting people, but Bahria Town is the place where most people love to shift, say real estate agents.

In Bahria Town, finding a rented space is a hard nut to crack at present. Construction of new houses is going on at a fast pace here and every day the administration approves eight to ten applications for home construction. The rent for a one-kanal house is around Rs100,000 whereas for an eight-marla house or villa the rent ranges between Rs40,000 and Rs45,000, but they are barely available.

Then comes the Army-controlled Askari Housing Schemes, which are 11 in number. Average rent for a 10-marla house is between Rs50,000 and Rs55,000 and for one-kanal house is between Rs70,000 and Rs80,000.

For other gated communities, average rent is around Rs60,000 and Rs65,000 for a 12-marla house and Rs40,000 to Rs50,000 for an eight-marla house.

Houses in these societies have not only adequate security, but they have other facilities as well, like community centres, parks, maintenance system and much more. Under-construction new housing societies will provide added features like a shopping mall and a cinema.

In the Defence Housing Authority, the rent is much higher than gated communities as this project is considered a safe investment and always acts as a market driver.

Average rent for a one-kanal bungalow in DHA ranges between Rs90,000 and Rs125,000, apart from few cases where the rent reaches Rs150,000. Average rent for a 10-marla house is between Rs50,000 and Rs65,000.

In Gulberg, average rent for a relatively new one-kanal bungalow is around Rs150,000 and for a two-kanal bungalow the rent is around Rs250,000. Rents in Johar Town are almost the same as in DHA.

Normally, 0.5% of the total cost of a house is demanded as rent. For instance, if the price of a one-kanal house is Rs20.5 million, the rent will be Rs125,000. However, negotiations play a major part in setting the rent. With this, the rent is increased 10% every year.

“This is the most common way of making secure investments by a majority of investors in an attempt to protect their capital as well as get a hefty monthly rent to meet their expenses,” said Waseem Tariq, Chief Executive Officer of F-1 Properties.

Few years ago, contractors were dominating this segment of the real estate market but as more and more investment is coming, many individual investors are constructing one or two bungalows for earning a monthly income. “Now, this trend is rapidly gaining pace because of demand from the people,” Tariq added.

Published in The Express Tribune, June 23rd, 2013.

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Reader Comments (8)

  • uet
    Jun 23, 2013 - 5:06AM

    Lahoris have always welcomed people from outside. Proud of their culture but also open heart
    enough to elect Sindhi like Bhutto and a Kashmiri like Nawaz Sharif as their Leaders.

    I hope newcomers bring peace and prosperity to their new home.

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  • Np
    Jun 23, 2013 - 6:27AM

    Can someone explain what is a 8 Marla house – how many square feet or square yards is it? What is a 1 kanal house? I see these terms often but do not understand them. Thanks.

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  • The Khan-Waterloo,Ontario
    Jun 23, 2013 - 6:40AM

    That is what you get when there is violence across the country except Punjab and Lahore

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  • Brig (Rtd.) Waheed Uz Zaman Tariq
    Jun 23, 2013 - 1:35PM

    First human instinct is survival. Safety, protection and comfort all make it possible. Lahore is comparatively safe city in Pakistan, with all amenities, scopes, possibilities and enterprises. It’s main problem is being a border city but the aura of today is not taking it in consideration. Lahore’s land is not unlimited and lucky were those who had some chunk of land in their name, when the situation favored them. As the prices of land rises, one needs more money to buy a house there. It may be at the expense of something very dear to him or with corruption. Despite all claims made by the consecutive governments, people do not get land to build. House of their own. Rent is beyond imagination and may suit only to those person for whom their employer pay the rent. Therefore, all such boom leave us with many unanswered questions.

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  • Global Citizen
    Jun 23, 2013 - 3:00PM

    @Np: The marla is a traditional unit of area that was used in Pakistan, India,and Bangladesh. The marla was standardized under British rule to be equal to the square rod, or 272.25 square feet, 30.25 square yards, or 25.2929 square metres. As such, it was exactly one 160th of an acre.

    The definition of marla varies between India and Pakistan. In India, the unit was standardized to 25 square yards. Its use in India is in decline, with the guz, square meter, acre and hectare being the more commonly used units. Bangladesh uses the same definition of marla as in India. In most of Pakistan, it is still equal to the British defined 30.25 sq yards, except in Lahore district of Pakistan where it is 25 sq yards. The old British definition of marla is often referred to as a “big marla” in India.

    One Pakistani Marla is equal to 9 square karm in Urdu and karoon in Punjabi language 9 Sarsahi is equal to one Marla. And 20 marlas in Pakistan are equal to one kanal.

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  • SM
    Jun 27, 2013 - 11:05PM

    No place like Lahore in the world; Lahore Lahore ae.

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  • Ammar
    Jun 28, 2013 - 8:25PM

    Love my city <3!

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  • ptr
    Jul 10, 2013 - 12:02PM

    because of wrong policies Lahore is the only place left in whole Pakistan with some opportunities and security. Not living here willingly but I have no opportunities back in my hometown’ Although Lahories are nice people.

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