House rents up by over 20% in twin cities

Newly established housing schemes in Islamabad also jack up rent

ISLAMABAD:

House rents in the twin cities of Islamabad and Rawalpindi have increased by more than 20 per cent during the last six months, further adding to the woes of the inflation-hit city dwellers.

House rents in Islamabad, Rawalpindi city and Cantonment areas and in the newly established housing schemes in Islamabad have increased by more than 20 per cent.

Similarly, settlements such as Ghauri Town, PWD, Media Town, Soan Garden, Jinnah Garden, Bahria Town, Gulzar-i-Quaid, Chak Shehzad, Chatha Bakhtawar, Shehzad Town, Margalla Town, Bhara Kahu, Khayaban-e-Sir Syed, British Homes, and Gulraiz have witnessed a surge in house rents by 20 per cent.

According to the inflation monitor report issued by the State Bank of Pakistan (SBP) for February 2022, house rent topped the list of contributions to the urban Consumer Price Index (CPI) as it weighed 19.26 during the last month of the current fiscal year. The report revealed that house rent prices soared in 2022 by 6.13% from 4.77% a year ago, reaching the second spot in the list of 10 weighted contributions to the urban CPI in February 2022.

Real estate agent Ahsan Khan said: "Previously, the rent prices used to surge in winter due to the arrival of people from neighbouring hilly areas and dropping down in summer when these people leave after spending the days of harsh winter in the twin cities." However, he added, for the last two years, the prices never dropped even in the summer. "I got a housing unit on rent in Gulraiz-1 for a price of Rs18,000 per month in November 2021,” he said.

“When we decided to vacate the house, the owner signed a contract with a new dweller for renting out the same house at Rs25,000 per month. I am afraid the rent prices will go further up till the next winter," said Khan, a resident of Kashmir who, along with his family, spends every winter in Rawalpindi to avoid the odd weather conditions in the hilly area.

According to another report of the SBP, the urban housing demand is going up by 350,000 units every year, of which the demand is met for only 150,000 units.

At the same time, prices of land and construction material have also been increasing manifold, making it more difficult for individuals, investors, and other stakeholders to fill this gap by constructing additional housing units. "

Increasing house rent prices indicate there is a visible gap between the demand and supply. The number of rural people settling down in the cities is way larger than the number of housing units built annually. The increasing rents mean that urban housing is now turning into a major crisis for those living and working in cities and a majority of them don't own a house," said the owner of a private construction company in Islamabad.

“Foreigners also have a role in jacking up the rental market. They are always ready to pay upfront amount for one year, and in certain cases, for two years,” Irfan, a property dealer in G-9-1, said.

“Some foreign nationals are even generous enough to meet the demands of the landlord and the property dealer. White-collar and middle-class citizens of this country have no choice but to grumble at their bad luck as citizens of this ‘Pak’ land,” he said sarcastically.

additional input by APP

 

Published in The Express Tribune, April 5^th, 2022.