Tremors’ impact on prices ruled out: Realtors keep sidelines
By Aamir Shafaat Khan
KARACHI, Oct 25: The recent tremors in the city may not have jolted the real estate market but certainly have depressed the level of activity in the sector. In DHA and Clifton areas the prices of plots and bungalows have not dipped but the sale and purchase trade has hit the rock bottom as investors have lost enthusiasm witnessed earlier.
The prices of plots and bungalows/flats, which have fallen by 30-40 and 5-10 per cent respectively six months back, are still intact to old levels “but there is dearth of sellers and buyers in the market.”
A senior official in the Defence Housing Authority (DHA), who asked not to be named, said some 10-12 documents of sale and purchase were being finalized in the office in a day for the last few weeks.
“Two months back, the office used to handle at least 50 documents for transfer and settlement, while four months back, the daily transaction were ranging between 100-120 documents,” the official said.
The property market has been facing a laggard session for the last few weeks and this can be termed as one of the main reasons of thin sale and purchase, he added.
It has been assumed by the market pundits that the property prices would fall in the aftermath of recent jolts in the posh areas but it has not happened yet because of the two facts. Firstly, the prices have already been on the decline and, secondly, buyers and sellers have pulled out themselves from the market, otherwise situation would have been different.
Abdul Wahab Parekh, chief executive of Parekh Estate at Clifton, claimed that the prices of plots and bungalows had still been pegged to six months old levels. “Recent tremors in posh areas have yet to jolt the already depressed prices further,” he added.
However, he claimed that tremors had started affecting the mindset of buyers of flats and apartments and its real impact would be visible after Eidul Fitr.
“Buying and selling have virtually touched the bottom as only 10-15 cases of transfer, sale and purchase in the DHA have been recorded in a day for the past two months,” he said.
Buyers and even investors have adopted a wait-and-see policy towards the DHA and Clifton market and recent tremors have further sent a negative signal.
Answering a query as to where the investors of posh areas have disappeared, he said that after investing in stocks they had also shifted their focus toward commercial areas by picking up old houses and vacant plots at Rashid Minhas Road, Shaheed-e-Millat, Clifton, Khaliquzam Road and other popular main roads.
He ruled out the possibility that investors of DHA was now moving towards Phase IX of Defence near Pakistan Steel, saying the new phase would take time to lure investors as a lot of work was to be done.
Owner of Pak Estate at Clifton, Khan Zubair Shaheen said that peoples’ curiosity for enquiring about the sale and purchase of property in the posh areas had slowed down after the earthquake. “Currently both sellers and buyers are watching the situation from the sidelines,” he added.
The business activities in the property market of posh areas have already been very quiet for the last six months and even the prices of plots and bungalows have been unchanged, he said. “Currently investors have disappeared from the posh area and it is hard to reveal where they are cashing their luck these days,” he added.
“Investors have put on hold their investment plans for DHA market,” Khan said.
He said that the tremors in the posh areas had yet to make its negative impact on the prices. “Enquiries about the new plots and flats have slowed down, but it does not mean that people are highly panicky after the earthquake in DHA and Clifton.”
Another realtor in DHA area said that the prices of plots in DHA phase VIII had already plunged by 40 per cent in the last few months and currently the property business in both Clifton and Defence had been facing a lacklustre situation. “In other phases the same dullness is prevailing owing to absence of both buyers and sellers”.
Mohammad Sohail, head Research at Jehangir Siddiqui, said investment in real estate had shrunk in posh areas as investors were mow moving to other areas. Besides, the increase in interest rates had reduced the speculation in the property market in the last few months.
However, he said that some investors were still taking the chance in stock market while a lot of investors were active in the business of sale and purchase of locally-assembled cars owing to good return compared to property business where only genuine players were active.
Besides, he said some small banks and DFIs had come up with new schemes of giving monthly return of around 10 per cent on investment, which has somewhat attracted few investors.
