August 7, 2003	Thursday	Jumadi-us-Sani 8, 1424

KARACHI, Aug 6: Open plot prices in selected phases of Defence Housing Authority (DHA) have finally plunged by 10-35 per cent in the last one month after reaching a psychological barrier in the wake of September 11 incidents, rising home remittances from abroad and tough immigration rules introduced by the US.

Property dealers say that the DHA area, particularly the phase VIII, has slightly lost its charm recently among investors whose huge presence in the last two years pushed the open plot prices to new peaks.

Investors’ wait and see attitude these days towards city’s most posh locality has brought some relief to the genuine buyers who are still hoping for further decline in prices to enter into genuine transactions.

The price of a 500 yard open plot at phase VIII has now caved to Rs3-3.2 million from Rs4 million a month back followed by drop of 1,000 yards plot prices in the same phase to Rs7 million from over Rs10 million. In some selected belts of the same phase, the 500 yards plot, which was quoted at Rs6.5 million, now carries price ranging between Rs4.4-4.5 million.

In phase VI and VII — the Rs7 million worth of plot a month back is now priced at Rs6 million, while 1,000 yards plot in same phases can be purchased at Rs11-11.5 million from Rs14

million.

Investors’ lean interest in the DHA had also partially filtered down in shape of fall of 10-12 per cent in bungalow prices. In Phase VI and VII, a 500 yard double storey bungalow can now be purchased at Rs9 million as compared to Rs10 million. A double storey 1,000 yards bungalow price dropped to Rs21-21.5 million from Rs25 million.

No hectic buying and selling were witnessed in phase II and 111, which are considered as the oldest phases of the posh locality.

Chief Executive of Pak Estate, Zubair Shaheen claims that the daily transfer processing of plot documents in DHA office has also declined to 25-30 from 85-80 a month back.

“Actually prices have artificially boosted due to heavy investors’ presence in the markets. It has come down after crossing the limits,” he said adding that investors have partially pulled back their interest in DHA areas.

He did not agree that the investors are now cashing their luck in mega Creek City project and unpredictable stock market.

It has been witnessed in the past that real estate prices usually take a plunge when stocks flare up. However, in the last two years, both stocks and real estate move up simultaneously.

“Actually investors have adopted wait and see attitude,” he said ruling out that sizable number of investors have switched over to Creek City project. He said investors do not usually take risk in limited number of property (flats).

He said the DHA market even now lacks presence of huge number of genuine buyers, who are now expecting a further drop in prices by five to seven per cent.

“Investors are currently out of the DHA property market,” sales executive of A-One Estate, Khalil Patel told Dawn. DHA real estate prices have now started simmering after an artificial boom. He recalled that few months back, many brokers had started making hectic buying of open plots and plot prices had been increasing by Rs100,000 per plot in a single day.

He was of the view that plot prices in phase VIII had gone down by 30 per cent as compared to 10 per cent price fall in other phases.

Chief Executive of Parekh Estate, Abdul Wahab Parekh says that plot prices in phase VIII have fallen by 20-30 per cent depending on the location. He linked the price drop to the entry of investors (not financially sound) who could not resale the property in allotted time and fled away after forfeiting the token money. He blamed many un-experienced brokers who could not identify the actual worth of the investors and conducted deal without seeing the party.

He thinks that new investors, after suspending investment in real estate, have shifted towards the stock market. He says that old investors are still present in the market and waiting for the right time to enter. He says that home remittances from abroad are still arriving at a much faster pace.

A total of $4.2 billion has arrived under home remittance in 2002-2003 as compared to $2.8 billion in 2001-2001. These huge arrivals have been invested mainly in stocks, real estate, auto sector, cash holdings and funding of expansion projects. The KSE index has jumped by 112 per cent in 2002 and 48 per cent from January till today, making a total increase of over 150 per cent in the last 18 months.

Investors had not found any attraction to pile up gold bars owing to fluctuating prices and in dollar since it lost its shine against other avenue of investment available.