The hustle and bustle and vertically climbing prices that characterised real estate market witnessed across the country couple of years ago, looks all but over, at least for the present. Property dealers sit idle scratching their heads as number of daily transactions show steep drop. With little variations the situation is same in Karachi, Lahore, Peshawar, Quetta and elsewhere. In this survey our reporters provide insight into property markets in some of the major cities of the country.
KARACHI, Feb 10: There is a slump in the property market in Karachi for the last two years due to lack of interest among investors who are now trying their luck in agriculture, commercial and industrial land outside the city areas like Super Highway, National Highway, Northern Bypass etc.
The investors are somewhat active in the transactions of commercial property situated at Shahrea Faisal, Rashid Minhas Road, I.I. Chundrigar Road etc., but they have been shy in taking plunge in the city’s main residential areas.
On the other hand, builders claim that 60-70 per cent new and old projects launched between Ramazan to Eidul Azha have been booked.
In the DHA area, the buying and selling activities, which have been lacking lustre for the last almost two years, have further jolted in the last six months owing also to imposition of two per cent CVT.The posh areas had witnessed a booming period from 2001-2005 in which prices of plots and bungalows had quadrupled due to heavy presence of investors and rising pace of home remittances.
“The situation has now changed. Investors have been on the sidelines for the last six to eight months perhaps because of looming political crisis in the wake of elections this year,” said Khan Zubair Shaheen, owner of Pak Estate in Clifton. Besides, the CVT imposition has also caused jitters among investors who wish to stay out of tax net.
“Hardly 20 per cent of property in the DHA is owned by old armed forces men as majority of the old allottees have sold their properties to the civilians,” he said.
Currently, only 8-10 property transfers is being carried out daily at the DHA office in which most of the deals are among genuine buyers and sellers, he said.
Khan said that plot prices in DHA Phase VIII had dropped by 25-30 per cent followed by 10-20 per cent decline in other phases including bungalows.
“Actually prices during 2001-2005 have reached the saturation point forcing investors as well as genuine players to back off from the boiling prices. Since April 2005, the rates have been undergoing various technical corrections owing to various reasons,” he elaborated.
Owner of Parekh Estate at Clifton Abdul Wahab Parekh said that prices of plots had actually plunged by 35 per cent since 2005. He added that only genuine buyers were engaged in buying and selling in the DHA but in very low numbers. “Only 10-15 documents are being transferred at the DHA daily due to absence of investors. Two years back over 100 documents per day were being transferred.
“Property business may remain sluggish owing to ongoing political uncertainty before elections,” he said while ruling out any sharp decline in prices in the wake of political crisis. Investors are moving towards commercial properties and outside Karachi for industrial, commercial and agriculture land, he added.
Abdul Wahab, owner of Johar Associates in Gulistan-e-Johar, said that property market has been extremely dull after the CVT imposition six months back. Plot prices had dipped by five to 10 per cent in Gulistan-e-Jauhar while there had been some technical corrections in house prices amid very low number of transactions.
“Overall the real estate market in the area has been calm for the last two years,” he said, adding that a broker who used to deal 5-6 plots a day in normal days, is hardly managing one deal in a week.
Association of Builders and Developers (ABAD) Chairman Hafiz Rahman Butt said that property business was going on but it lacked enthusiasm as compared to one and a half years back.
“The imposition of two per cent CVT has turned investors reluctant to invest in property business. However, the unjustified decision is generating very nominal revenue and the CBR chairman knows it very well,” he said.
He said that around 60-70 per cent flats in 10 new and old projects launched between Ramazan to Eidul Azha had been booked. However, the country still requires 700,000 houses every year in which only 400,000 units are being built by both the government and private sector leaving a backlog of 300,000 units, Butt added.
