We all know that Karachi is probably the worst place to live in if you own an expensive mobile phone. Really bad choice that. Karachi is widely touted to be the real estate capital of the country. But that title is now under threat from both Lahore and Islamabad. Despite having taken a huge hit over the past couple of years, the city’s real estate market still has some life left in it, but maybe not for long.
According to data provided by Zameen.com - which is Pakistan’s largest real estate portal - recent trends show that investors no longer consider Karachi their first, or even second choice for that matter, when it comes to making investment decisions. This is specifically true when it comes to buying a house. But if it is real estate – specifically residential land – you want to buy, if you invest in Karachi, you still cannot go wrong. But even here, Karachi is losing ground – literally.
Lahore is now the first choice for real estate investors, with Islamabad a close second. According to Zameen.com search trends, in the first half of 2012, there were 2.2 million searches for real estate in Lahore followed closely by Islamabad at 2.1 million. Karachi was a distant third at just 1.5 million searches. The monthly trend gives no real indication that this slide is likely to reverse in the near future.
In fact, Rawalpindi, because of its proximity to Islamabad, is up at fourth and has been holding steady or making marginal gains in the first half of this year.
If we break this up, then Lahore is the clear cut leader when it comes to the ideal location for living or buying land for investment. Islamabad is the second target for real estate investors, but still behind Karachi as a choice for residence.
According to the zameen.com data, for land, it is just DHA Phase VIII in Karachi which is still a major draw, and that too because now people are able to take possession of land for construction. Without this saviour, Karachi would have been even further behind. Phase VIII is larger than the rest of DHA combined, so it has the potential to affect trends. Surprisingly enough, number two on the list is not Clifton, but Gulshan-e-Iqbal.
This perhaps is the main reason why Karachi is falling back: the lack of good choices for investors. Gulistan-e-Jauhar was supposed to become the next big thing, offering affordable accommodation, but security issues have stunted growth. Lahore has several prime zones like DHA Bahria Town, Gulberg, Wapda Town, Cantt, and Johar Town. Islamabad has areas like DHA, Bahria Town, G-13, E-11 amd G-11 among others.
There is one thing one can say for Karachi. It is tough. Despite all the security and law and order issues and the crime and the scarcity of water – all the things that investors consider when making choices – the flow of investment has slowed down, but hasn’t dried up. The interest is there, and, according to property dealers, it won’t take more than a few months of sustained peace before Karachi will once again become a big draw for buyers. The question is, will there be peace?
Published in The Express Tribune, October 8th, 2012.
COMMENTS (12)
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Well I think situation is Karachi is very complex compared to Lahore and Lahore will took the top spot in future in my view. Lahore is all about Homogeneous Society while Karachi is more like a Place of parallel societies. In my colony out of ten houses three families had come from Karachi and interestingly in five years they integrated well and their children speak better Punjabi than me and I think you need only one Generation or perhaps five to six years to become a Lahori and especially I have seen Karachites are the best when the case of Integration matters and Why I love Lahore more than Karachi that in Lahore apart from new comers old Lahoris are very much Homogeneous in culture and especially Intermarriage is bringing families together as my One Bhaabi is a Baloch and my mother is Karachite and father from Punjab and now they are all Lahoris and that is absolutely great but i dont think this can happen so easily in Karachi as people are so wary of each other that you cannot even imagine according to my experience.
We were told by a prof in MBA, few years ago, that Indians are buying property in Lahore. Through their front man. In Karachi, you much be careful that your laNd is not liked by Aadi else you have to tfr it to tout
Great report, I agree that the markets tend to vary as per political scenario/situation and with a more peaceful environment in Karachi we would definitely be looking towards great investment returns.
I believe now is a great time to invest in Karachi as some real estate tycoon very correctly said
"Buy property when there is war"
This entire report based on a single websites search results! which is ridiculous to say the least. Financial data along with numbers of projects proposed are what matter!
There are hundreds of residential apartment buildings being built in Karachi along with several housing schemes such as 70 riviera, Naya Nazimabad, Karachi Golf City. The only thing Karachi does not have is Bahria Town which is exclusively located in Punjab. However, recently they have initiated commercial projects such as Icon Tower (70 story building) and Bahria Town Tower (30+).
Not to mention, this site is famous for promoting Bahria Town.
How many are being built in Lahore or Islamabad? only a few.
While it is no surprise that Karachi's real estate is no longer what it used to be - the article cites probably the weakest of sources for its conclusion - search results on a website! How many people looking to buy real estate in Pakistan would go and search on the mentioned website? To make a headline based on an extremely weak (and subjective) deduction is not very sensible - but then we're reading the ET here so no surprises.
With rampant corruption even in places like DHA Karachi and growing land mafia answerable to no one, the investment scenario in Karachi's real estate is undoubtedly bleak.
Die hard Karachites would never move to Lahore or Islamabad! DHA Phase-8 in Karachi is the most sound real estate investment which has the potential to go up substantially. The hot climate of Lahore would kill a Karachite. With all the short coming of Karachi I think it is still the best place to live. When I visit Karachi & Lahore I still enjoy my evenings in Karachi as compared to Lahore although I am a Lahori.
I hope no one is surprised that the real estate is filled to capacity of guanda & political connected. Pakistan society is mired corruption and this is not a recent phenomena but we refuse to accept the fact we citizens of this society sit idle, complain & moan but do little to rid the evils that plague Pakistan. Are we afraid, have we accepted that this is here to stay? Or do we not have men of integrity & braveness to finally shake the shackles of this vile illness?
Actually Karachiites are more averse to using technology than Lahoris so that is why there are fewer of them searching for property on zameen.com.
my father was a real estate developer in karachi so i can tell you the whole business is filled with gunda and politically connected people (land grabbers) and the bribes in KDA are the worst compared to another other department in the country, probably. there are set bribe rates for per acre land in each part of karachi. if you dont pay that bribe rate, your lawful work doesnt get done. the only people i saw who were successful were either people who were very well politically connected and hence gave profit shares to politicians for getting their work done or were well connected to land mafias who were again well connected to politicians. my dad told me at one point, the rate in KDA for per acre land in gullistan-e-jauher was 1 crore/acre (end of musharraf era).