Slowdown: Real estate market yet to find strong ground in 2015

Remains stagnant during first quarter.

LAHORE: The 2015 real estate market has got off to a slow start as much of the revenue generated in the first quarter of the year has remained stagnant or recorded small profits and losses.

The market is at a standstill in all major cities including Karachi, Lahore and Islamabad. Average increase in prices of plots of one kanal or 605 square yards in prominent localities has disappointed investors, but the situation varies from area to area.

Karachi

Despite the lukewarm activity, the real estate market in the country’s largest city and economic hub managed to grow 4.8%. Here, the property market is mainly driven by the Bahria Town and Gulshan-e-Iqbal localities.



According to a report prepared by Zameen.com – a real estate portal, real estate prices in Bahria Town rose 3% in the first quarter while prices in the Defence Housing Authority (DHA) Karachi, which had increased 11.85% in 2014, fell 2.3% in 1QCY15.

DHA City, which posted a price gain of 24.28% in 2014, grew only 1.6% in the first quarter of the current fiscal year.

Gulistan-e-Jauhar, the locality that led the real estate market with a price rise of 22.19% in 2014, disappointed the investors with a negative return of 3.3% in 1QCY15.

Lahore

Bahria Town locality posted a negative growth in real estate prices, which dropped 7.4% in the first quarter of 2015 compared to a decline of 1.12% in 2014, according to Zameen.com. DHA Lahore on an average showed a 2.2% growth in property prices, disappointing many investors.

Lahore Cantonment, one of the most luxurious localities, saw a price increase of only 0.5%, while property rates in the Lahore Development Authority (LDA) Avenue dropped 1.6%. LDA had posted a hefty gain of 24.19% in 2014.

Commenting on the downturn, Zameen.com Co-founder Zeeshan Ali Khan said there was no reason for getting panicked.

“Even though things have slowed down a bit in Karachi and Lahore, I don’t think there is any reason for investors to worry. This is the first quarter of the year, so observing things closely to identify trends is the right thing to do at the moment.”

Islamabad

DHA Islamabad led the capital’s real estate market by gaining 12% in the first quarter, according to Zameen.com.

DHA also performed well during 2014 when it led investors’ sentiments by posting 12.09% gains in prices for a plot of one kanal. Real estate prices in Bahria Town, which dipped 22.8% in 2014, recovered somewhat by rising 5.5% in the first quarter of 2015.

Sector F-11 remained almost stagnant, whereas Sector G-11 posted a negative growth of 5.7%. Sector E-11 also dipped 1.3%. F-10 merely increased 1% whereas Sector B-17 posted a negative growth of 7%.

However, real estate experts are calm and expect a stable second quarter when prices may fluctuate in a tight band.

Published in The Express Tribune, April 8^th, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.