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.