LAHORE: The real estate markets of Pakistan’s top metropolitan cities continue to witness an encouraging trend for the first six months of the current year.
However, introduction of a new mechanism to gauge the value of property instead of the deputy commissioner’s value in order to promote greater degree of transparency and new taxes in the federal budget 2016-17 may well have lasting effects on the real estate market for the rest of the year.
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Although a committee has been formed to somewhat limit the effects of the legal changes, real estate experts argue that it all depends on the outcome of negotiations between the stakeholders and Finance Minister Ishaq Dar. Successful talks can further improve the market, however, if things remain undecided for long then the uncertainty may turn investors away.
According to a report launched by Zameen.com, Pakistan’s first property portal, Karachi and Lahore in the first six months of current year have shown an impressive growth, however, Islamabad failed to attract investors.
The property market of the port city of Karachi improved sharply during the first six months of 2016.
As per the data collected by Zameen.com, DHA City Karachi (DCK) performed remarkably well as prices of 500-yard plots increased 23.91%. However, DCK property values are still not on a par with those in DHA Karachi. So, investors are naturally attracted to the former locality.
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Development work in Bahria Town Karachi is on schedule and a steady rise in prices is evident in the locality. During the first half of 2016, prices of a 250-yard plot rose 11.82%.
Gulshan-e-Iqbal, on the other hand, showed stability and did not impress investors, as a moderate growth was the order of the day for the 250-yard plots in the locality.
Lahore’s property market performed remarkably well in the first half of 2016. Prices spiked in various localities, for instance the price of 10-marla plots in DHA Lahore’s Phases VII to IX increased 13.48%, placing it high on the list of coveted areas for real estate investment.
The 10-marla plots of Bahria Orchard also performed remarkably well, as prices rose substantially by 23.08%. Meanwhile, for the value of one-kanal plot in the locality, moderate growth was observed.
Despite legal complications, the LDA Avenue I also saw controlled growth in the value of one-kanal plots and exponential growth in the value of 10-marla plots. Wapda Town and DHA Lahore’s Phases I to VI, however, showed mediocre growth, the report said.
Investors were disappointed with the performance of the capital city in the first half of the year. Controlled growth was observed only in DHA Islamabad’s one-kanal and 10 marla plots. This locality performed well because of the on-going construction of the signal-free Islamabad Expressway and the development work that was being carried out in several parts of DHA Islamabad.
Meanwhile, Bahria Town Islamabad/Rawalpindi, Sector B-17, Sector E-11 and Sector F-11 squeezed out unexceptional growth.
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Bahria Town alone showed a 10.20% and 6.45% drop in prices of one-kanal and 10 marla categories, respectively.
Sector F-11’s commercial properties showed better activity due to the Capital Development Authority’s strict new policy towards non-confirming use of residential properties in the city.
“The first half of the year has proven to be promising for the property sectors of Lahore and Karachi. However, we are not too taken aback over the slow performance of Islamabad’s property market, as it still has the potential to grow,” said Zameen.com Chief Executive Officer Zeeshan Ali Khan.
The markets will continue to suffer for a few more months due to a nearly stalled market in July, added Mian Talat, a Lahore-based real estate leader.
Published in The Express Tribune, July 27th, 2016.
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