Eid heralds real estate recovery

Property prices start to increase, says report

LAHORE: Pakistan’s real estate market has started showing a positive trend in the second half of 2015, making up for the rather dull second quarter.

The country’s property market seems to have rediscovered its zeal on Eid that brings many overseas Pakistanis back home for holidays.

According to a report released by zameen.com; a property portal, Lahore and Islamabad have successfully recovered from the short-lived slump witnessed in their property market during the month of Ramazan.

With investments coming in from a vast pool of overseas Pakistanis visiting home for Eid, Lahore in particular, the market has made a sound comeback. “Bahria Town seems to be a favourite locality for them, as reflected in the striking growth of its property rates,” said the report.

Lahore

THe property market experienced a decline due to a number of factors during Ramazan and the month preceding it.

Doubts involving the route of Lahore Ring Road’s southern loop along with a less-than-sufficient drive in the market resulted in small investments spread randomly over the time preceding Eid.

Post-Eid, however, prices took a positive turn as reflected in the growing popularity of LDA Avenue-1 and Bahria Town.

A growth of 5.778% in the average prices of 1-kanal plots for LDA Avenue-1 in the evident by the stark increase in prices. Bahria Town also showed a controlled rise of about 4.16%, while Lahore’s Cantt’s 1-kanal plots managed to exhibit steadiness with a negligible 0.46% rise in prices after having been continuously falling since January. DHA Lahore, however, exhibited a modest 1.44% increase. With an average price of Rs37.9 million for 1-kanal houses, DHA Lahore topped the charts in Lahore. It was followed closely by Lahore Cantt that offered the same sized property for Rs37.5 million.

DHA Lahore also offered the highest rental yield for July 2015, up 4.11%.

Islamabad

While Sector F-11 remained stable, investors focused on Sector E-11 and Bahria Town during July 2015.

The controversial situation in DHA Islamabad brought about by DHA Valley issues and Dadocha Dam brought the prices down to where they were at the beginning of the year.

A drop of 6.44% in 1-kanal plot prices in DHA Islamabad contrasted sharply with a 5.96% rise in price for the same-sized plots in Bahria Town. Sector F-11 was relatively stable with a 0.89% fall in prices, while Sector E-11 depicted a controlled rise in prices that went up 4.11% since the previous month.

Despite the marginal increase, Sector F-11 remained one of the most expensive places to buy a 1-kanal house in Islamabad with an average price of Rs68.5 million. Sector E-11 followed close with Rs63.5 million.However, Bahria Town managed to offer the highest rental yield with a 4.28% return.

Karachi

The improved security situation of the city benefitted the property market immensely.

Apart from DHA City Karachi, figures improved sharply following the operation by the security forces, especially Gulshan-e-Iqbal and DHA Karachi.

For a 500-square-yards plot, the average price in DHA Karachi rose moderately by 4.65%, while in Gulshan-e-Iqbal, the average prices went up by 5.76%. Against this major boost, Bahria Town Karachi exhibited a controlled rise of 3.62%, whereas a 0.34% increase in average prices for same-sized plots in DHA City Karachi meant stability for this under-development project.

Though offering the highest rental yield of about 5.01%, Gulshan-e-Iqbal’s average price of Rs37.7 million for a 500-square-yards house fell second to DHA Karachi’s average prices for houses of the same size at Rs59.3 million.

Published in The Express Tribune, September 4^th,  2015.

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