KARACHI, March 11: Speculative trade in real estate has touched almost a frenzy level as brokers are now booking sale and purchase orders for the property that does not exist at present but is being planned for future.

The rich investors who are loaded with tons of money are being lured into buying industrial plots in third phase of Nooriabad Industrial Estate some 85 km off Karachi on Super Highway on payment of Rs200,000 to Rs300,000 per acre premium over the official rate of Rs125,000.

“The Sindh government has not yet approved the allotment of 5,000 acres to the SITE Limited for development of third phase of Nooriabad Industrial estate and thus no process of allotment of this land has been taken up by the SITE Limited,” the Managing Director of SITE Limited Syed Hashim Raza Zaidi informed Dawn in his office on Friday.

“Neither the new rates for the plots in the proposed third phase have been fixed nor the format of the application form has been approved by the Board of Directors of the SITE Limited,” Zaidi added.

He disclosed that his office has received as many as about 750 applications so far through various brokers for purchase of these industrial plots. “All these applications are invalid, worthless and premature,” the SITE Managing Director declared in a firm tone making it clear that no applications for allotment would be entertained until the Board of Revenue gives land to the SITE Limited and the Board of Directors frame necessary procedure for its allotment to the investors. “I am returning back all the applications,” he said.

Zaidi said that the provincial industries minister Mr Adil Siddiqui has asked the SITE Limited to take strong action including litigation against all those real estate brokers involved in this business what he called ‘fraudulent booking’.

More than a year ago, the Sindh Industries Minister and the SITE Limited was at the centre of a controversy on balloting of about 150 industrial plots in the scheme 33. Zaidi said that the allotments have been cancelled and Rs305,000 have been refunded to each applicant.

At present there are over 60 factories in the first phase of Nooriabad spread over 3,000 acres. The second phase of Nooriabad has been fully developed on 2,000 acres and industrial plots have been allotted but no factory has been set up. The Industries Department now wants to develop a third phase of Nooriabad on 5,000 acres for which the Board of Revenue has been approached but no decision has been taken by the Sindh government.

Real estate and construction business is attracting all big investors of the country but there is no good news for the middle and lower income group people who now find life in Karachi and all other big cities more miserable than ever before. Generous bank lending amounting to Rs625 billion and inflow of about Rs400 billion remittances in last 18 months has fuelled the real estate and construction business as investors have virtually very few choices to put their money in. “Almost a trillion rupees have been injected in the market during last 18 months which has put everything on fire whether it is construction, real state, stock exchange or commodities,” a real estate broker explained.

Housing projects are coming up virtually in all parts of the city and flats and town houses are being booked by the speculators rather than those who are looking for their ‘dream house’. In Garden East, once a posh area of the city called Dollar Area about 20 years ago, is now a scene of demolition of old bungalows and construction of multi storied buildings. All apartments are booked before the plinth level construction gets completed and an unending series of purchases of apartments makes the cost beyond reach of someone who really needs a place to live.

“Imagine the banks gave only Rs583 billion loans to private borrowers in last eight years against which they have been given more than Rs625 billion in just eight years,” argued a senior official of the finance ministry in Islamabad who said the reforms carried out by

the government has created enormous demand for bank credit and has enhanced the capacity of the banks to lend more.

But all this generous lending by the banks that include Rs39 billion consumer loans and over Rs8 billion housing loan during July to Dec 2004 period has brought no joys for the small and middle income group people.

As the prices of apartments and town houses have become unaffordable so is the rent. A two-bed room flat in old town area now is being rented on Rs8,000 to Rs10,000 a month while its cost is anywhere from Rs1.2 million to Rs1.5 million. A person drawing a salary of Rs20,000 to Rs 25,000 a month finds it hard to either pay monthly rent or consider purchasing a flat.