Real estate markets slow down in budget month

Indicating maturity, the markets show no sharp movements before and after budget

LAHORE: Real estate markets across Pakistan recorded a lacklustre activity in May as investors and property buyers waited for announcement of the federal budget for 2017-18 later in the month to see what new steps the government was going to take.

Like property, nearly every sector pauses and waits before the budget to find out what economic managers are going to decide for their industry.



Since real estate markets were burdened with additional taxes in the previous budget, market players were cautious this time around, though no new taxes were imposed for the upcoming fiscal year.

Nevertheless, the markets did not show any sharp downward march before and after the budget, indicating its maturity.

Lahore

Markets in the city were slow throughout the month of May.

According to zameen.com, a real estate portal, property rates in the Defence Housing Authority (DHA) Phase VII, VIII and IX exhibited mixed trends as Phase VII registered a price fall and Phase IX picked up.

Overall, the price growth was moderate at 1.1% for one-kanal (605-square-yard) plots and 2.9% for 10-marla (302-square-yard) plots.

The Lahore Development Authority (LDA) Avenue-1 experienced a moderate drop in property prices, continuing the downtrend from last month. The housing society’s litigation issues proved to be detrimental and caused the decline in prices.

On the other hand, real estate prices in Wapda Town and Bahria Town remained stable. In Bahria Town, prices fell marginally by 0.52% for one-kanal plots and 0.16% for 10-marla plots. Real buyers took a back seat, which affected overall market activity in the area.

Islamabad

The city’s market experienced some downtrend during May 2017. Overall, since June last year, the market has been pretty stagnant because of the additional and higher taxes levied in 2016.

In May, real estate prices in DHA stayed relatively stable with a minor 0.4% dip in one-kanal plots and 0.26% fall in 10-marla plots.

Prices in Gulberg Residencia remained stable as well because of the budget announcement and Ramazan. Its sectors E-11 and F-11 continued to remain static with little or no activity.

Bahria Town took a hit where Sector B-17 saw a sharp fall in property prices. However, prices are expected to rise after Eidul Fitr. In the sector, activity increased because of a large number of buyers.

Karachi

As activity in Gwadar continued to rise, DHA and DHA City Karachi (DCK) registered a fall in property prices. In DHA, prices fell 3.21% for 500-square-yard plots and 5.39% for 250-square-yard plots.

DCK, on the other hand, saw a moderate dip of 1.1% for 500-square-yard and 1.35% for 250-square-yard plots.

In Bahria Town, real estate prices rose significantly because of heightened development activity. Though Bahria Paradise was the main factor that helped push prices up in Bahria Town, prices in the housing society itself did not increase significantly.

As always, real estate market in Gulshan-e-Iqbal remained stable as high population density there restricted the market from any sharp fluctuations. Activity is expected to pick up pace soon after Eid.

Gujranwala

Overall, property prices showed mixed trends in the city. Citi Housing and DC Colony registered a drop in prices whereas rates in DHA increased and in Master City they remained stable.

Prices in Citi Housing and DC Colony dropped because of an increase in transfer fee. Citi Housing, however, saw only 0.08% fall in one-kanal plots and 0.03% fall in 10-marla plots.

Although the number of customers in the locality decreased, this did not affect the prices. DC Colony, on the other hand, registered significant price drops.

Prices in DHA continued to rise with a 3.17% increase for one-kanal plots and a 1.7% increase for 10-marla plots. Master City remained more or less stable and only recorded a mild fall in prices of 10-marla plots.

“Lack of activity is nothing to worry about and certainly nothing new. I expect market activity to pick up speed after Eid. It is the trend every year that things slow down around Ramazan. Speculation around the budget also makes the market quiet because people are waiting to see whether taxes will rise or not,” zameen.com CEO Zeeshan Ali Khan said.



Gwadar attracted investors from Karachi and it had been a persistent trend for some months now. That had dampened investor activity in Karachi, but it was expected to rise soon, Khan added.

Published in The Express Tribune, June 22^nd, 2017.

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