KARACHI, March 8: The city’s most posh areas — Defence Housing Authority (DHA) and Clifton — have attracted a wide spectrum of investors, particularly after the 9/11 incident and introduction of new immigration rules in the US, resulting in flare-up of plot prices by over 30 per cent.

Property market in Defence and Clifton has seen higher returns after the 9/11 incident and property dealers forecast a positive picture if the flow of home remittances from abroad continues.

Brokers say the real estate market, particularly in phase VIII of Defence, has caught the attention of investors and their entry has caused phenomenal jump in the rates of open plots.

“About 80 per cent of investors are active in purchasing open plots in Defence’s various phases as compared to 20 per cent genuine buyers,” chief executive of Parekh Estate, Abdul Wahab Parekh and proprietor of Pak Estate, Zubair Shaheen, told Dawn on Saturday.

The enthusiasm among investors to grab an open plot can be gauged from the daily processing of transfer of documents in the DHA office. Zubair Shaheen claims that around 30-40 transfer of plot documents take place these days as compared to 10-15 documents before the current spurt. While Wahab Parekh says that around 50 plots are being transferred daily.

However, an official in the DHA presents a different scenario by saying that around 100 documents for transfer of plots are being processed as compared to 30-35 documents before.

The DHA official says that new immigration rules introduced by the US government last month has further injected new vigour in the property market, particularly for plots in phase VIII, which is being developed at a fast pace. He was of the view that current increase in rates of plot was the actual price which could not be realized earlier due to slump in the market. He says that as long as sizable presence of investors exists in the market followed by enough liquidity, prices of property in Defence area will remain on the higher side.

Wahab Parekh says the arrival of dollar has played havoc with the property prices as people want to shield their capital. Around $2.5 billion has arrived during July-January 2002-03 from abroad and people and investors are now more eager to buy property.

“Property always pays even in short term. Its return manifolds in the long run,” he says. He says that a 2,000-yard plot, which was available at Rs5,500 per square yards last year, is now available at Rs8,000 in phase VIII, while a 500-yard plot price ranges between Rs2.4 and Rs2.5 million as compared to Rs1.5-1.6 million in the same phase. He adds that a 300-yard plot price hovers between Rs2 million and Rs2.2 million as compared to Rs1.0-1.2 million.

Similarly, in phase VI a plot of 2,000 yards is available at Rs8,000 per square yards as compared to Rs5,000-6,000. In phase VII, a 500-yard plot can be purchased at Rs4.5 million as compared to Rs3.5 million.

Zubair Shaheen says that a 300-yard plot in phase IV carries price tag of Rs3.6 million as compared to Rs2.5 million in 2002, while 500 yards plot in phase V is being sold at Rs5 million as compared to Rs4 million.

In bungalow, a 300-yard brand new bungalow is now priced at Rs6.8 million as compared to Rs5.8 million, while an old bungalow is being sold at Rs4 million as against Rs3.8 million. The price of a new bungalow of 500 yards in phases V, VI and VII has shot up to Rs9 million from Rs8 million, while an old bungalow in same phases is now available at Rs6.2 million as compared to Rs5.5 million in 2002.

A brand new bungalow of 1,000 yards in phases VI and VII is being sold at Rs19 million as compared to Rs17 million, while an old bungalow carries price of Rs13 million as against Rs10.5 million.

Similarly, the price of open plots in Clifton has also shown an increase. In blocks like 5, 7 and 8, the price of 1,000 yards plot has surged to Rs12,000-15,000 per square yards from Rs9,000- 10,000.

Head Research of Invest Capital and Securities, Mohammad Sohail, says that currently investors are cashing their luck in three main areas — real estate in posh areas, stock exchange and national saving, and perhaps real estate has appeared as their first preference.

He says that investment in the dollar and gold has no more an attractive options for prospective investors. He says the performance of stock markets has improved as compared to last year and people are putting up huge capital in national savings despite their low rate of return — between eight to 10 per cent.

As long as banks’ interest rates remain low and there are signs of flagging confidence in the market, property market of Defence and Clifton is likely to remain the investors’ choice. It could not be ascertained that in case interest rates go up, investors would take a U-turn towards keeping capital in banks.