The real estate sector of the metropolis of Lahore has been performing well consistently for the last three years or so. This is encouraging the people to invest their savings by purchasing pieces of land. Lahore is experiencing rapid urbanisation due to a relatively better law and order situation as compared with other cities, which makes the city the 26th largest city of the world in terms of population. The people from adjacent cities migrating to Lahore are another reason behind the city’s growth. This is creating a demand-supply gap in the housing sector, especially in the developed areas and gated communities.
It is very tough these days to find places on rent in Lahore, which has resulted in an increase in rent. Additionally, genuine investment in the real estate sector has, so far, caused a hike in land prices, more than 100 per cent in some areas. Though things are now plunging in this sector, experts are calling it a healthy sign for the market, consequences of which will, once again, lead the prices to go up. The land and unit prices in Lahore have now reached a point where it is becoming increasingly tough for citizens belonging to the middle and lower income groups to construct a home.
The Punjab government is in no mood to disrupt things in this sector as it feels that it encourages the development of the city. A fresh venture in this regard has come in the shape of an organisation, which will develop some 70,000 acres on the outskirts of Lahore, costing some $10 billion in local and foreign investments. This will initiate a new wave of land price hikes in those areas where the middle class still dreams of owning a piece of land. This mantra has already forced many small-scale businessmen to close their units, which were idle due to the energy crisis, and put their money in the real estate market.
If this trend continues for a few more years, Lahore could become the most expensive place to live in the country. Even the city’s economy will revolve around the real estate and housing sectors only. Proper legislation for this sector is now required to incorporate dealings into the tax network, to generate revenues and to put the Lahore housing market under scrutiny. All this will hopefully also minimise the frauds which citizens often face.
Published in The Express Tribune, November 8th, 2013.
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