Internews/Karachi

Pakistan’s new PML-N led ‘pro business’ government helped property prices touch new highs in the second half of 2013, with rates largely stabilising in the 2014 first quarter, it was learnt yesterday.
Property prices remained stable across three of the country’s major cities during the first quarter (Q1) of 2014. The property markets of Lahore, Karachi and Islamabad, which had registered increases in prices throughout 2013, were lukewarm during Q1 of 2014 with little buying and selling activity.
In Lahore, DHA remained the most sought after residential area. The average price of a 1-kanal plot was Rs11,807,331 in May 2013, which climbed the charts rather sharply in later months after the formation of the new government.
By November 2013, five months after the elections, prices of 1-kanal plots had shot up 21.75% to Rs14,377,440. From this point onwards, prices experienced a slight correction and, as of April 2014, are hovering around the Rs13,500,000 mark.
Property prices in Bahria Town, Lahore, saw less of an upsurge following general elections. Between May 2013 and April 2014, prices for 1-kanal plots did rise 16.50% but there were no sudden lurches after the elections or the budget.
Even the ongoing correction failed to have much of an impact on prices in Bahria Town, which largely progressed at their own pace.
Wapda Town and LDA Avenue I, on the other hand, had a fantastic year in terms of property prices. With development work underway, both have experienced impressive growth in the prices of 1-kanal plots, with the former stabilising towards April 2014.
The housing sector presents a similar story. Given the kind of luxury taxes the Punjab government has levied on houses of 2 kanals or more in Category A areas (mostly upscale areas such as Gulberg, Cantt and DHA), one would have thought it safe to assume that their prices would have suffered but, interestingly, the real estate data shows a 19 per cent increase in prices of 2-kanal houses in DHA between May 2013 and April 2014.
Between May 2013 and April 2014, 1-kanal houses in DHA and Bahria Town registered 16.36% and 14.71% increases in prices respectively. The rent for these houses in DHA shot up by a whopping 54.02% during this period.
A market report for 2014’s first quarter showed a mixed picture for Islamabad as well; prices depicting a steady market in all but a few areas.
F-11 was the one glaring exception to this trend with the recent bullish form of the prices of 1-kanal plots in the neighbourhood.
The year 2013 did not come with any extraordinary dividends for Islamabad in general, and most of its popular areas carried this stability into 2014 except for F-11, where residential plots recorded a rise of 10.14% in the first four months of 2014.
For Bahria Town Islamabad and E-11, replicating F-11’s performance has been an elusive task. Prices for 1-kanal residential plots in Bahria Town have dropped 18.87% since January 2014 and prices that had been rising in E-11 since December 2013 have also slowed down.
The housing market has fared better in Islamabad during the last 12 months than plots. Prices of 1-kanal homes in F-11, G-11 and E-11 went up by 11.32%, 43.28% and 24.61%, respectively, during this time.
Similarly good performance was witnessed in the rental market in the first four months of 2014, with all three CDA sectors posting decent rental yields.
Law and order in Karachi may not have been up to the mark over the last 12 months, but that did little to slow down the property market in the city. Compared to Lahore and Islamabad, Karachi has definitely had a better run with consistent improvement in property prices.
In DHA Karachi, 1-kanal plots showed a bullish trend. In May 2013, the prices for residential plots of this size stood at Rs19,811,940; by April 2014, these prices had increased by 27.96%.
Impressive price increases were also seen for plots in Gulistan-e-Jauhar and Gulshan-e-Iqbal as well, where scarcity of land pushed prices up. Price graphs for these areas show a considerable jump in April 2014, which may continue into June as well.
In terms of rental prices and, more specifically, average annual rental yield, Clifton unsurprisingly remains the most promising location.
For 1,125 ft2 and other smaller apartment units in the locality, average rental yield was 5.98% in 2014. This, by far, is the highest return any residential unit has exhibited in 2014 anywhere in Pakistan.
Zeeshan Ali Khan CEO of a real estate portal said that the market could pick up in the latter half of 2014 on the back of overseas Pakistanis returning home for Eid, giving buying and selling activity a boost.
Khan, who keeps a keen eye on the very happening realty sector of Pakistan, expects 2014 to end on a positive note for the market.