LAHORE: When prices of real estate stagnated in 2014, all eyes were focused on the next year with hopes that it would bring along some momentum in the market. Truly, the much-needed activity emerged, though in part, in the first half of this year.
In almost all popular localities in Karachi and Islamabad, property prices went up over the six-month period from January to June 2015, showed data released by zameen.com, a property portal of the country.
Lahore, however, continued to record sluggish activity with prices remaining static this year as well. But this is not a worrying sign. The property market of Lahore often slows down when investors pay more attention to real estate developments in the country’s capital as well as in Karachi.
In an encouraging development, several new projects are on the cards in Lahore, including the 60,000-kanal LDA City and the 40,000-kanal DHA Phase IX. These and other projects are widening the scope of investment opportunities in the city, which will help steady the property market in the long run.
Read: Bulldozing NARC: Bosan requests PM to turn down CDA’s proposal
In the first half of 2015, one of the top localities in the city, Lahore Cantt, registered a decline of 9.29% in prices while real estate markets in DHA Lahore, Bahria Town and LDA Avenue-I remained stable.
Average price for a one-kanal plot went down only 1.02% in DHA Lahore in the first half whereas in Bahria Town the same plot cost 3.26% more over the same period.
Similar stability was noted in LDA Avenue-I, where average price for a one-kanal plot edged up a negligible 1.05%.
Though Johar Town continued to offer one of the highest rental yields at 4.26%, DHA Lahore and Lahore Cantt remained the more expensive neighbourhoods. On average, a one-kanal house in the localities cost Rs36 million and Rs37.5 million respectively.
Here, three of the four popular localities recorded decent gains in the first half, with Bahria Town the only top locality posting a slight drop in property prices. In comparison to the miserable second half of 2014, this was a good turnaround for the real estate market in the capital.
A moderate growth was noticed in Sector F-11 and DHA Islamabad as prices of one-kanal plots rose 6.05% and 6.96% respectively. There was also a modest growth of 6.39% in plot prices in Sector E-11.
Read: The issue of withholding tax: ‘Shock therapy’ won’t fix taxation mess
Bahria Town, however, remained stable with a slight dip of 1.20% in one-kanal plot prices in the first half of the current calendar year.
Sector F-11 was one of the most expensive areas for buying one-kanal houses in Islamabad with an average price of Rs68.2 million. It was closely followed by Sector E-11 where average prices were Rs62.9 million for a one-kanal home.
However, Bahria Town, despite a slight dip in average prices, offered a high rental yield at 4.35%.
With investor focus squarely on Karachi for several months now, the city’s top localities have seen decent rises in prices as well as hectic activity in the first half despite Ramazan and a deadly heatwave.
Gulshan-e-Iqbal and DHA City Karachi recorded handsome price increases whereas DHA Karachi and Bahria Town also posted healthy gains to play their part in a very encouraging overall performance.
Prices of a 500-square-yard plot in DHA Karachi showed a restricted - by Karachi standards - growth of 6.09% while Bahria Town posted a healthy rise of 9.85%.
Prices went up 12.36% in Gulshan-e-Iqbal and 12.23% in DHA City Karachi, indicating a satisfactory and controlled growth.
DHA Karachi was one of the costliest neighbourhoods for buying homes with average sale price of Rs58.9 million for a 500-square-yard house.
Though Gulshan-e-Iqbal offered a relatively higher rental yield at 5.01%, average house prices stood at Rs37.4 million in the locality, well short of the prices prevailing in DHA Karachi.
Published in The Express Tribune, July 16th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.