Real estate: Select properties show growth

Karachi posts stronger numbers than Lahore, Islamabad


Shahram Haq June 23, 2015
If April 2015 was slow for Lahore, May 2015 was a downright crawl for the city’s real estate market by comparison, where all of the major localities saw downward trends. PHOTO: REUTERS

LAHORE: As a slowdown remains under way in the property markets of Lahore and Islamabad due to Ramazan and the annual budget, Karachi’s real estate market continued to show good activity and growth.

According to zameen.com, Pakistan’s largest property portal, figures from May 2015 show that the trend seems to have continued more or less as it was in April 2015, with small improvements in Islamabad and a further decline noted in Lahore.

Lahore

If April 2015 was slow for Lahore, May 2015 was a downright crawl for the city’s real estate market by comparison, where all of the major localities saw downward trends. Propped up by Phase IX’s balloting, DHA Lahore managed to keep its prices stable ahead of Ramadan with only a negligible 0.29% drop, but notable price dips were seen elsewhere in the city, according to data provided by zameen.com.

Lahore Cantonment’s one-kanal plots saw prices drop another 1.02% in May 2015 after a similar drop in April 2015. Prices for one-kanal plots also continued to decline in Bahria Town, with a 3.48% drop in May 2015. LDA Avenue I also suffered a 3.04% decline in the prices of its one-kanal plots in May 2015.

Islamabad

Islamabad’s real estate market also witnessed a slowdown in April 2015, but, unlike Lahore, the federal capital’s market showed a bit of improvement in May 2015, though still nothing close to a stellar performance. Sectors F-11 and E-11 continued to show growth with a 2.51% and 1.16% rise in the prices of one-kanal plots in both localities, respectively.

Meanwhile, Bahria Town Islamabad/Rawalpindi showed stability in May 2015 with a negligible 0.46% rise in prices, which came on the heels of a price drop in April 2015. DHA Islamabad, however, continued its downward trend with a 1.48% drop in one-kanal plot prices in May.

Karachi

Karachi’s real estate market built on a strong overall performance in April 2015 to post good overall numbers in May 2015 as well. DHA Karachi was on top of the list once again, and DHA City Karachi also exhibited a healthy rise in prices in May 2015. None of Karachi’s other prominent localities experienced a drop in prices either.

For one-kanal plots, DHA Karachi’s average prices showed a healthy 4.57% boost in May. A controlled 2.76% rise in prices was also seen in DHA City Karachi, while Bahria Town Karachi’s 1-kanal plots gained 1.96% in value on the back of solid onsite development work. Gulshan-e-Iqbal’s one-kanal plots gained a modest 1.33% in May after a more solid 2.64% gain in April.

Published in The Express Tribune, June 24th,  2015.

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COMMENTS (1)

asad rizvi | 5 years ago | Reply Hats off to Tribune for frequently choosing important topics pertaining to our Country's Macro and Micro economic issues. Though short but interesting topic. With sharp changes in domestic economic environment, the big question that needs more elaboration and should to be discussed more in detail is that is the Bull run in Real Estate Market sustainable or will soon fizzle out ? Things are change fast politically and economically. Recent Budget too is tightening the noose. Real estate prices in Pakistan has reached such an height that property of same size or equivalent is cheaper in Middle East, Europe or in North America. Official Registered amount is 6-8 times lower than the actual transacted value of the property. It is a known fact that since Pakistan is an undocumented economy, there are many loopholes and escapes roads for black money to be parked. This is why Tax to GDP ratio is 9 pct. Some important measures have been announced in FY 2015-16 budget. In the Budget it is suggested to impose Withholding Tax of 0.6 pct for non-filers on all banking instruments. It has proposed 10 pct tax on Realtors. Benami Transaction Act, has proposed ample of power for investigating officers for possible impounding of documentation. If free access to to search premises/account is allowed against benami transaction this is going to be terrible new for such investors. Interestingly it is observed that TV Channels, which was playing Real Estate Advertisement all the time have suddenly stopped showing adds. Have we seen the top and now is the Real Estate Market heading for a Nosedive? What if talk of talk of corruption and accountability proved to be true? Should we watch Karachi Stock Exchange for a guideline? Or if all is well, then share that why nothing is going to happen and why Real Estate Market would continue to enjoy its Bull rally. It will be interesting to hear and share views from all participants.
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