KARACHI, Nov 18: Real estate agents predict further slump in property transactions following announcement of increase in valuation rates by the Sindh government.

They also anticipate decline in prices in already laggard real estate market.

They said that they do not have the notification in hand yet but market is abuzz with the news that the Sindh government has increased the valuation rates.

Some estate agents in various areas expressed their ignorance about the Sindh government’s move.

However, there have been some reports about the scuffle between the buyers and sellers at the registrar offices where officials have already started charging new rates.

Property markets especially in the category of over 500-yard houses and bungalows have taken a mild battering due to imposition of two per cent Capital Value Tax (CVT) few months back.

In many areas prices of plots, houses and bungalows have fallen in the last few months and especially after the CVT levy.

Abdal Magray of Civic Associates in Gulshan-e-Iqbal predicted a 25 per cent fall in prices of plots and houses and said that the decision would further curtail property transactions depriving the government of revenue.

He claimed that property market had already been depressed for the last few months. The price of 240-yard bungalow in Gulshan-e-Iqbal comes down by Rs1 to Rs1.5 million followed by decline in 400-yard bungalow price by Rs2.5-3.0 million and Rs4.0-5.0 million in over 600-yard bungalows. Even plot prices had also eased by Rs0.5-0.6 million in the last few months.

He said even the genuine deals between buyers and sellers had fallen sharply while investors were already at the sidelines. People who deal purely on cash (often dubbed as cash party) had also been out of the market, he added.

An estate agent in Gulistan-e-Jauhar said that rates of plots (240-600 yards) had fallen by Rs0.5-1.0 million while rates of house of same size categories had declined by Rs1.0-1.5 million. “The rates will further dip when people and investors loose interest in real estate business,” he added.

Owner of Johar Associates in Gulistan-e-Jauhar Block 1 Abdul Wahab said that buyers/sellers were seen perturbed at the registrar office where the official had started implementation of the decision.

“I was there at the registrar office by 1.30pm but I could not get the notification. The officials were charging the rates on some verbal communication with the Board of Revenue officials,” he said. Transactions in property market have been very slow for the last few months and especially after the CVT imposition. “Property deals will further decline after the Sindh government’s decision,” Abdul Wahab said, adding that there had been virtually very few taxes and duties (on lower side) in Punjab as compared to Sindh.

Owner of Nazimabad Estate in North Nazimabad Block H Mohamamd Najib said that property rates and number of transactions would further come down.