Pakistan property sector celebrated quite a happening 2013 in terms of sale, purchase activity as well as prices. Not only did the house prices register huge jumps during the year but plot prices also showed a bullish trend across three of Pakistan’s major cities i.e. Lahore, Karachi and Islamabad.
Although the market remained considerably warm throughout the year but nothing could quite beat the activity that was noticed after Eid-ul-Fitr. Overseas Pakistanis, who visited home for Eid, further boosted the activity in the market. Several posh areas in Lahore, including DHA, were especially targeted by the overseas investors.
The peaceful transfer of power to the newly elected government rejuvenated various industries of the country. Real estate was one beneficiary of the newly found political stability of Pakistan which ultimately boosted investors’ confidence. As a direct result of this, a lot of genuine demand was created in the market, which pushed the property prices up.
Karachi, which was the recipient of a number of high profile projects, performed exceptionally well where, as per Zameen.com’s stats for 2013, 1 kanal (500 sq yard) houses registered an increase of 71.85% in their sale prices.
Property prices in Lahore steadily climbed with DHA in the forefront
2013 brought along noticeable growth for the Lahore real estate sector. DHA, which is one of the most popular and promising communities in the city, continued to command investors’ attention due to high return on investment and the security offered by DHA’s management. According to MunirAhmed of Nazir Estate, “With a simple and transparent buying process, it’s easy to see why investors prefer DHA over all other communities in Lahore.”
Because of reasons like these, DHA remained the recipient of a major chunk of foreign investments that flew into the country in 2013, generating a frenzy amongst buyers. Driven by high demand, 1 kanal plots in the locality saw an average price hike of 33.62% in 2013. During the first 9 months, average prices of 1 kanal homes rose by 20.29% whereas the average rental yield for the houses of the same size remained 4.30%.
While people generally showed a clear preference for DHA Lahore, Bahria Town Lahore still managed to register increases throughout the year with a few negligible falls here and there. Although the average sale price of 1 kanal plot increased reasonably in Bahria Town Lahore during 2013 yet their prices, as per Zameen.com’s stats of Dec 2013,remained 28.93% cheaper than1 kanal plots in DHA, which means that DHA Lahore enjoys an upper hand in terms of investments.
For 1kanal houses in Bahria Town, prices jumped from Rs 19,950,000 from the start of the year to Rs 24,416,667 at the end of 2013 with an average rental yield of 4.26%.Residential plots (of 1 kanal) in LDA Avenue also registered 8.87% hike in prices during the same year.
2013 brought growth for Islamabad property market
Islamabad had a slow start to the year. Ali Akbar of Arsalan Ali Associates believes the market only picked up during the later months. Saqib Chaudhry from Prime Estate seems to agree with this viewpoint.
CDA, amongst many other local developers, announced a couple of new sectors in 2013, which initially had trouble attracting investors. F11, E11 and G11 remained a few of the authority’s more popular sectors during the year where plot prices also registered impressive hikes. Zameen.com’s data shows a hike of 46.06%, 32.55 and 45.56% in sale price of 1 kanal plot in F11, E11 and G11 respectively in 2013.
These rises may appear impressive on their own but they seem puny when compared to the hikes Bahria Town Islamabad registered in 2013. The average spike for 1 kanal plots in the locality during the said year was a whopping 117.20% where prices jumped from Rs 6,516,269 in January to a mindblowing Rs 14,153,252 at the end of the year. For the houses of the same size in the locality, the rise was only 20.66%.
Bullish trend in Karachi
Karachi property sector, despite the on-going law & order situation, performed rather well in 2013. The last quarter in Karachi was particularly happening and that’s when prices truly picked up. For 500 sq yard (or 1 kanal) plots in DHA Karachi, prices rose by 23.09% within twelve months. DHA Karachi is widely considered to be a trouble free area which is why it consistently performed well with a 20.34% rise in its (500 sq yard) house prices during the said year.
What’s interesting to note in Karachi was Gulshan-e-Iqbal which put up good numbers on the board in terms of price hikes. The low supply of 500 sq yard plots in the area pushed their prices up by 39.49% which is particularly impressive since Gulshan-e-Iqbal is generally not considered as ‘hot’ as DHA in terms of investment. This uppish trend was mirrored in the performance of Gulistan-e-Jauhar as well where plot prices of the same size gained 17.33% rise.
Bahria Town, which announced an array of projects towards the end of the year in Karachi, was received well. While some investors had reservations about their entire membership forms and registration process, there were many who plunged into the market and made good profits in such a short period of time. Bahria Town’s success in Karachi remained the highlight of the year for the local property market.
2014 likely to be a good year for the market
Many estate agents and experts are of the opinion that 2014 would likely be another positive year for the property market. According to Abdul Majeed of Defence 4 U, this upward trend is expected to continue into 2014 where he expects the market to truly pick up after March 2014. What is for certain is that DHA Lahore will continue to be the apple of the eye of Lahoris and the new developments of DHA Lahore will see increasing convergence of investors as the city expands in future.