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KARACHI, Jan 19: Arrival of around one billion dollars in home remittances during the last six months from expatriate Pakistanis has stimulated some activity in the sluggish property market particularly in city’s posh areas, resulting in slight price hike in plots and houses.
Real estate agents report an increase in prices of bungalows in Defence Phase V, VI, VII and VIII by at least five to 10 per cent. Exactly same situation exists in Clifton particularly in areas located on the main road.
Clifton area is in high demand but the availability of vacant plots and finished bungalows are insufficient to cope with the rising demand, estate agents in Clifton say.
In some phases of Defence, people are seen searching for 500 yards plots since the availability of 1,000 yards plots have been decreasing gradually.
Estate agents say investors’ presence in posh areas like Defence and Clifton is still lacking and only private buyers loaded with remittances sent from Gulf, the United Kingdom, the US and Saudi Arabia, are on a hunt for suitable plots and houses.
The volume of home remittances was stuck at one billion dollars per year for last several years but it picked up pace from October 2001 following September 11 catastrophe in the USA, thus causing a stir among Pakistani residents abroad to park their in their homeland.
Estate Agents also link the marginal increase in property price in Defence and Clifton to partial conclusion of Afghanistan crisis coupled with a pause in war like situation between two arch rivals — Pakistan and India.
They said that big businessmen and tycoons, whose second generation has completed their studies, are trying to expand their business by buying industrial plots in Port Qasim, Korangi and SITE areas for their young generation. This buying has appeared in the last one and half years after remaining lean from 1990 to 1998.
For example, a one acre plot in SITE area, which used to cost Rs8 million, can now be purchased at Rs10.2 to Rs 10.5 million. In Port Qasim, the price of a one acre plot has surged to Rs1.5 to Rs2 million from Rs1.2 million.
Proprietor, Parekh Estate, Abdul Wahab Parekh, who deals in Defence and Clifton areas, said transactions in commercial plots has been on the standstill in almost all parts of the city as investors as well as local businessmen still feel that conducive business environment has not yet prevailed after September 11 and India-Pakistan stand-off in December. “Commercial business activities is virtually dead these days,” he said.
“If the current peaceful scenario persists, property business in posh areas will further pick up in one or two months,” he said adding investors will again plunge in property business after a gap of two years. Investors have pulled back themselves after May 1998 following nuclear blasts by Pakistan.
GULSHAN-E-IQBAL and GULISTAN-E-JAUHAR: Abdaal Magray of Civic Associates, dealing in these two localities, said prices of flat has surged by at least Rs25,000 to Rs50,000 and Rs100,000 to Rs300,000 in bungalows in the last few months.
He said 1,000 yards residential plot now costs Rs6,000 to Rs7,000 per square yards as compared to Rs4,000 to Rs5,000 per square yards.
“Market has only genuine buyers. Investors have adopted a wait and see attitude till the economic situation further improves,” he said.
People living in Gulshan-e-Iqbal and Gulistan-e-Jauhar are also moving to Defence Phase VI and VII and in some blocks of Clifton. In comparison, Gulshan and Gulistan-e-Jauhar still attracts a large number of people living in Nazimabad, F.B. Area and North Nazimabad.
Middle income group areas are yet to see any extra buying euphoria as against the on-going genuine property transactions between sellers and buyers. Estate agents say that property business is still passing through a lacklustre period, resulting in price fall of about 10-20 per cent in various areas.
Mohammad Najib, proprietor, Nazimabad Estate said that in Nazimabad, F.B. Area and North Nazimabad, prices have witnessed no change and even in some areas prices have crashed. Only genuine transaction between sellers and buyers are currently taking place.
“These areas have more sellers than buyers,” he said adding that in many cases both sellers and buyers have been waiting to strike a deal since the last six to one year.
He said economic meltdown and rising cost of living have now started compelling many people to shift to smaller house in these three localities in order to secure some capital or invest it in other business to run their kitchen and utility bills expenses.
Real estate transactions also depend on the government’s levies on various documentation. The government has reduced the stamp duty by 10 per cent but the decision to transfer power of attorney and change in valuation category of plots and houses have adversely affected the real estate business as buyers and sellers have to manage extra amount.
ABAD: Builders and Developers have different views. Chairman, Association of Builders and Developers (ABAD), Hafiz Butt said the property prices in residential areas have declined by at least 30 per cent and by 40 to 50 per cent in commercial category due to lack of government’s incentives to the construction industry coupled with investors’ pull out.
Construction activities have been on the standstill since the last two years due to government’s tax survey and suspension of loaning facility by the House Building and Finance Corporation (HBFC). “Investors still feel shy from the construction and real estate business,” he added.
He, however, hoped that the construction as well as property business will show some improvement due to regularization of buildings Ordinance.
