PESHAWAR, Feb 10: Real estate prices in major towns of NWFP remain stagnant for the last one year owing to absence of potential investors in the market.
According to property dealers the people, who invested in property during the boom period 2000 -01, were looking for what they called 'better' returns before leaving the market in search of high-yielding avenues.
Figures collected from the market indicate that during last two to three years property prices have drastically fell in Hayatabad and Regi Lalma, the two major township schemes of Peshawar.
Citing the example of Hayatabad township scheme phase-I, a property dealer said that the prices for one kanal at present were ranging between Rs3.8 million to Rs4 million, while these prices during the boom period were between Rs4.5 million to Rs5 million per kanal. Similarly, per kanal prices at phase-II of the scheme were between Rs3.8 million to Rs4 million as compared to Rs6 million to Rs6.5 million recorded just one year back.
Being the most valuable area of the same township scheme, the real estate prices in phase-IV had also registered a sharp decline during last one year, as per kanal rates of property had dropped from about Rs8 million to Rs6.5 million.
Situation in the under-construction Regi Lalma township scheme was no different where according to the dealers the prices had witnessed an average decline of almost 50 per cent. Currently, per kanal prices even in developed zones of the township had dropped from Rs2.2 million to Rs 1.5 million.
Likewise, prices in suburbs of the provincial capital including, Sheikh Maltoon in Mardan and Kanju township scheme in Swat district, had fallen, said Shams-ur-Rehman, a property dealer.
Market sources say that the flexible housing finance facilities offered by the banks and lack of substitute profitable means of investment had been the reasons for boom in the real estate sector three years back.
Similarly, following 9/11 the country's home remittances sent by the overseas Pakistanis were invested in the real estate business because traditionally, people in the NWFP prefer to invest in it for better returns and lesser risks of loss.
However, the property dealers contend that very few individuals invest in the real estate business and it was the land mafia, which was responsible for the earlier boom and present stagnation in the market. They said for the last couple of years there were speculations that the government was considering tax on real estate business, which prompted the investors to start gradual withdrawal of their money from the market.
A property dealer, who wished not to be named, said that Hayatabad township was an ideal field of activity for such big players, where investors from across the province execute business because of easy procedure for transfer of property ownership.
He said that during the boom-period these people invested in the real estate business and contributed to an artificial surge in prices, however, during last one year they pulled out their capital from the market that ultimately led the prices to drop and put the market in a static position.
Sources in banking sector also termed the decline in the property prices as a result of certain restrictions on house financing and higher interest rates on bank loans.