KARACHI, Oct 25: Property dealers have confirmed the sluggishness since the start of this calendar year, but attributed the dullness in the local real estate business to a variety of factors.

Some linked the slackness in buying and selling activities in the city posh areas (where investors are more active) to weak market sentiments. Others blame newly-found passion for Dubai based real estate projects. Still others believe that uncertain political situation has driven investors out of the market since March this year.

Only genuine deals are being struck as demonstrated by sharp fall in the transfer of property documents that have been ranging 8 to 15 a day as compared to over 100 a day in a boom period.

The imposition of two per cent capital value tax (CVT) last year has also discouraged the investors to operate in the property market. Besides, prices of plots and bungalows have reached a level much beyond the reach of the majority restricting the number of players.

Abdul Wahab Parekh, chief executive of Parekh Estate, told Dawn that some top eight to 10 builders of the city had entered the Dubai market in a big way by introducing various flat and apartment projects there. Without disclosing their names, he said that these builders had excess money which was generated from the booking of various projects launched in the city and had invested this public money in Dubai.

Besides, some small and medium-sized investors have also tried to cash in on their luck by booking various flats and shops in Dubai. These activities have been underway since March this year.

Because of the country’s volatile political situation, the property rates in the DHA and Clifton have been static for the last one and half years owing to lack of investors’ interest. However, it has been noticed that property rates witnessed an upward technical correction by five per cent but later plunged depending on the political scenario or some positives news.

“After the October 18 carnage, the property market in posh areas has become further laggard,” Mr Parekh said.

In reply to a query whether property investors had been active on stock market, he said serious investors did not take risk in stock market which often dubbed as “stroke market” and was controlled by the top 10 brokers who take dictation from Islamabad.

“Property market will remain dull till elections are held as investors do not feel safe to invest right now,” he said, adding that there has been some activity in commercial plots and shops rather than residential plots and bungalows.

Owner of Pak Estate in Clifton Khan Zubair Shaheen said that investors had been out from the property market but it did not mean that all of them had moved to Dubai where property prices had come down during the last one month.

People had made massive investment in booming real estate business in DHA and other areas like Gulistan-e-Jauhar following huge influx of home remittances during the period of 2001-2005 which had pushed up property rates by four times.

Mohammad Arif Malik, president Clifton Defence Real Estate Association (CDREA), observed those investors who had reaped fortunes of booming property market had now been actively playing in the Dubai real estate market for the last one year.

“The DHA and Clifton markets have become further slow after the October 18 carnage as people have adopted a wait-and-see attitude in entering any property deals until elections are held,” he said.

Giving an example of price, he said a 500 yards plot in Phase VIII (D-cutting) was priced at Rs750,000 in 2001 and in 2002 it surged to Rs3 million. By end of 2005, it was available at Rs12.5 million. Now it was priced between Rs8 to 8.5 million after the bursting of artificial price bubble in 2006.

Hardly 20 per cent properties in DHA are owned by old armed forces men as majority of the old allottees have sold out their properties to the civilians.