Some projects faced hurdles, but did not affect overall real estate market
LAHORE: The real estate market entered the fourth quarter smoothly, banking on the success of several popular property markets.
This followed a continuous rise in prices of real estate in major cities – Lahore, Karachi and Islamabad – in the third (July-September) quarter of 2015.
Even though some projects of prominent developers did face a few impediments, this was not a reason enough to raise major concerns, according to a report released by zameen.com, an online property portal.
According to the report, Karachi’s realty market performed brilliantly. There was just one exception – Bahria Town Karachi – which posted unfavourable numbers as prices of 250 square yard plots fell 5.39%. Similarly, a drop of 3.85% was recorded in 500 square yard plots in the third quarter.
DHA Karachi and DHA City Karachi, on the other hand, did not disappoint and gave investors encouraging returns. DHA Karachi recorded a sharp 8.27% price gain for 500 square yard plots and an even sharper rise of 12.35% for 250 square yard plots.
DHA City Karachi registered increases of 16.60% and 11.65% in prices of the two categories respectively.
DHA Karachi once again emerged as the most expensive locality, where the average sale price of a 500-square-yard house stood at Rs60 million and that of a 250-square-yard home was Rs41 million.
The property market of Lahore saw a humble upward movement. Although many major localities continued to excite investors by registering good levels of growth, DHA Lahore remained merely stable in the one-kanal category with prices dropping a negligible 0.69%.
However in the 10-marla category, a sharp drop of 6.61% was registered in the third quarter, said the report.
There could be a variety of reasons behind this, including the imposition of withholding tax on banking transactions, a rise in taxes and the income source disclosure notices sent to investors. Most significantly, the take-off of DHA projects in Bahawalpur, Multan and Peshawar may have shifted investor focus.
In contrast, Bahria Town and LDA Avenue-I performed well despite multiple pending litigations. Bahria Town depicted a sharp price rise of 14.57% for one-kanal plots and a 5.32% increase for 10-marla plots. LDA Avenue-I posted a 5.04% rise in the one-kanal category and 7.63% gain in the 10-marla category.
The real estate market of Islamabad showed a mixed picture. Sector E-11 registered price increases of 3.33% and 1.69% and F-11 recorded rises of 2.22% and 3.73% for one-kanal and 10-marla categories respectively.
Bahria Town experienced a sharp 5.66% rise for one-kanal plots whereas prices of 10-marla plots remained stable, with a negligible drop of 0.76%. Activity in DHA Islamabad seemed listless this time around. The one-kanal category saw a 1.57% drop, while 10-marla plots recorded a 4.30% drop.
The status of DHA Valley and the intended development of Dadocha dam on its site remained controversial. Needless to say, investor confidence has taken a hit.
However, DHA Islamabad has recently announced plans to allot alternative plots to those affected by the DHA Valley problems, so things could start to look better soon.
Predictably, Sector F-11 remained one of the most expensive localities, where the average price of a one-kanal house stood around Rs69 million and that of a 10-marla house was around Rs36 million.
Published in The Express Tribune, November 1st, 2015.
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