Surge: Rs16m to Rs26m, is the price range for a plot of one kanal in DHA Lahore Phase 5, up Rs4m from prices a month ago. ILLUSTRATION: JAMAL KHURSHID
General elections and annual budgets usually put a damper on growth of real estate markets as investors and land purchasers are unsure about upcoming political developments and are uncertain about policies to be adopted in the new budget.
This time seems to be an exception. The real estate market of Lahore, of course with some hiccups, has continued to boom, primarily driven by investment from overseas Pakistanis, victory in elections of what is perceived to be a pro-business political party and an energy crisis forcing people to pull out money from other areas and pump it into real estate, say market people.
Though there are several housing societies in the city offering a luxury lifestyle, people place a lot of trust in army-controlled Defence Housing Authority that has now expanded to 11 phases.
Bahria Town at the other end of the city is also performing quite well, but not like the way DHA is doing. These two major housing schemes have also helped bolster plot prices in adjacent societies.
Like every year, rumours of expected imposition of property tax are doing rounds in the market before the announcement of budget, but surprisingly they have failed to stop the increase in land prices, especially in DHA.
Before general elections on May 11, land prices, however, fell by hundreds of thousands of rupees depending on the plot size and location, but the market recovered quickly after the polls and recorded hefty increases. In some phases of DHA, prices for a plot of one kanal rose by as much as Rs2.5 million.
In DHA, Phase 5 is the most lucrative area where prices for one-kanal plots reached Rs22.5 million compared to Rs18.5 million before elections, a jump of Rs4 million.
In Phase 6, prices have risen by an average of Rs1 million and stand in the range of Rs9.5 to Rs15.5 million. In Phase 7, average increase in prices is Rs0.5 million and one-kanal plot is fetching Rs6.6 to Rs11 million.
Prices in other areas including Johar Town, Wapda Town, Valencia Town, EME, Bahria Town and many more have also recorded an upward march in recent months.
In Bahria Town, average price of a plot of one kanal, which ranged between Rs6.5 and Rs9 million few months ago, is now between Rs8 and Rs12.5 million, a rise of Rs1.5 to Rs3.5 million.
“Price increase is not abnormal and we are not expecting any major drop in property rates in the near future,” says Mian Talat, Chief Executive Officer of Talat Enterprises, a real estate agent.
Genuine buyers, not speculators, are purchasing plots, especially in DHA, which enjoys excellent repute, he says.
Talat agrees that market people are talking about government slapping taxes on property in the upcoming budget, but insists that they are not taking it seriously and continue to purchase land for building homes.
“If a small tax is imposed on property sale and purchase, it will not disturb the market,” he says.
For real estate agents, the newly elected government may be a reason behind the price hike, but there are other factors as well.
“The real estate market during the tenure of previous government was also performing quite well, so you cannot give full marks to the newly elected government for the price hike,” says Waseem Tariq, another real estate agent.
He believes that overseas Pakistanis are pumping money into real estate for safe investment as they do not have more choices. Energy crisis too is forcing many people to withdraw their investments from different sectors and invest in real estate.
He expects the market to not stop here and see more price hikes in coming years primarily due to the interest of bona fide buyers this time.
Published in The Express Tribune, May 29th, 2013.
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@waseem tariq: I appreciate your views. Otherwise, Rizwan has used word "cowards" for us, which amounts to abuse and is a sign of the inner anxiety of the writer. I feel that is the condition common in Pakistan. Our patriotism dos not need any certificate. Pakistan is our own country and we want to do whatever we can for it. The reversal of flow of money is imminent, as people wait for safe investment in Pakistan. Transparency, audit, review of the corruption and safety of life and property is the main requirement of any society. Energy crisis and difficulty in approval of plans and projects, nepotism and so called commission maphias and land grabbing is the norm there. We have faced the realty there for half a century and do our best. The youth of the country must play its part now and creat a conducive atmosphere for business and investment. Reliability of the promises is questionable and the still we are Ina fluid situation in Pakistan. We Re eagerly observing the situation till we may act. I am optimist to say that the day will come.
I think Brig. Waheed's point of view is valid. Obviously in the current situation people who are sitting abroad are very disappointed as the situation here seems more critical especially if you are sitting abroad and looking at the law and order situation in those countries. anyway if law and order situation will be better and especially will be a good control on corruption, situation will be good and Pakistan will be an ideal country for business as we have everything here which most of the countries dont have but they are making a good progress.
Dear Rizwan. I have not made my point of view clear. I ahve spent 50 years in Pakistan and 29 years in uniform of army. My son and daughetr in law still in the uniform of armed forces. I hace sent to the country in the terms of money more than most of the people and all of mine belongs to Pakistan. I have neither a dual nationality nor taken money out of Pakistan but did the opposite. I left the country when I was left with no other option. I want to die and be burried in pakistan. When I say "we" I mean the way expatriates thinik in general. We send more foreign exchange than the whole trade of the nation and bail out the IMF loans. There is lot with the people (expatriates) to be sent home but the situation in the country at present is not friendly for a business (no electricity, kidnappings, law and order and corruption). These issues have to be dealt amicably by the people of Pakistan with a will to do so. We see anxiety in Pakistan which is obvious from the words of our people. General opinion of the poeple is that they do not think it is at all safe to invest at present. The money is coming out of the country by those wo are coaward and we are not those. A day will come when the matter will be sorted out by teh epople. We have played our innings there with all honesty and sincerity and we have all hopes from the younger generation like you. In the end of tunnel we want to see light before the atmosphere becomes congennial.
@Brig (Retd.) Waheed Uz Zaman Tariq: Sir please don't come back and we don't need ur money. If you are so much aware and we'll wisher of pk then come back home and stand shoulder to shoulder with us and fight.. Don't smoke cigar in air conditioned rooms being expatriate and discuss situation of Pakistan. Cowards.... Thanks
Pakistan is home to many inherent problems. Power shortage with power thefts, law and order situation and dwindling foreign exchange reserves. I am an overseas Pakistan with all my connections within Pakistan. We send money home but are cautious about return. We will put our hard earned foreign currency in the dust and clay of Pakistan but after certain assurances. Even a plan for visiting Lahore for a week or so in this weather is a nightmare for us, when there is no electricity despite heavy bills. People living abroad are more aware of law and order and other problems of Pakistan and we shall not siphon our money to a tunnel till there is some light in the end.
time to impose a good tax and FBR to take notice of people who have recently bought plot. how they managed crores when all industries in Pak are down. which business is so profitable except politics
time to impose a good tax and FBR to take notice of people who have recently bought plot. how they managed crores when all industries in Pak are down. which business is so profitable except politics
My father just bought 3 pieces of land in DHA lahore and he's living in Saudi Arabia. Many people from Saudi are snapping up real estate in Pakistan despite bad condions as laws are tightening up against expats. It's a majboori.