Alhamdolillah! By the grace of Allah (SWT) I had an opportunity to performed HAJJ last year and it was a wonderful experience, May Allah accept Hajj of All Hajiis and mine too. After performing Hajj, this is my first write-up for DCK particularly in the series of monthly forecast.
It was long time ago, my last analysis was published in August 2015. The last quarter of 2015 was very active for Real Estate Market, and it was one more promising year for the stake holders as mention earlier in January 2015 forecast. I wrote the words in March 2015 that “(2015 will be the year of DHA City Karachi)”, Alhamdolillah it has been proved. Prices multiplied minimum 2 to 3 times within this short span of time and particularly last quarter was so bullish and made new highs in DCK and DHA Karachi too. People made their money double or more than double in this year and it was 100% all the way, and once again it has been proved best returns on Investment. Nothing will produce this kind of returns with safety and security of DHA.
As it was already mentioned in August 2015 that the ON Amount of all size of plots are increasing on regular basis besides 200 yards only, and it was expected to cover this gap in 200 yards category, and it has proved in last quarter. 200 yards plots produced best return in September and October 2015.
Market made new highs in almost all the categories, and touched the new price barrier which was never seen before. 200, 300 and 500 yards plot touched 45, 60 and 75 Lacs price level respectively on minimum side (lowest price sectors) which was almost double from the lowest price within 6/8 month time. Nothing can produce this kind of returns with security of DHA where people feel more comfortable and secure to invest, these returns came with very low risk and it was amazing.
Numbers of transactions were also on higher side and there was heavy involvement of investors, brokers, and genuine buyers including local and overseas buyers. There are many reason behind this move.
First of all very keen interest of Administrator DHA Brig. Zubair Ahmed, since his joining, he took great interest in this project. Full team of DCK take part in the development of DCK under his leadership, and focus on development of DCK and handle the tasks according to plan. Further their marketing strategy was too aggressive and they created very good awareness campaign and people realized that this is the best place to invest. DHA also claim that 2015 will be the year of DCK, and it has been proved “DCK 100 % all the way”.
The other main reason was that the mature investors who sold/liquidate their Phase VIII options at very good high price, they have only DCK option to invest with same confidence level, and as Phase VIII also created new high, it was excellent feasibility to liquidate the position in Phase VIII and reinvest the funds in DCK, with same brand and with very low price volumes.
Besides this, other important factor was very slow market in Bahria Town Karachi (BTK), as people lose confidence since November 2014, and suffer huge loses in last deal of BTK, and not happy with ongoing scenario in BTK and in this kind of situation investors always find other places, and this time it was DCK.
One more factor which also played a major role behind this bullish move of DCK was DHA Oasis Farm Houses, it was launched by Star Marketing, and it was a hit project of 2015. Great marketing campaign created full hike in the market. Market was on positive move when DHA Oasis launched, on 6th November when the balloting ceremony was held in DHA Country & Golf Club, the starting ON money was 5 Million rupees, on the registration slip, where people only deposited 1 Lac rupees. It was amazing and a lottery for the successful applicants. This ON money was 7 and 9 Million on 2500 and 3000 yards farm houses with the initial deposit of same amount of 1 Lac rupees. We already forecast about this and mention in my In-depth analysis on DHA Oasis Karachi.
This time market create history that on the investment of 1 Lac rupees only people get benefit of 90 Lacs (3000 yards farm house). The reason of this high ON money was very low quantity of farm houses. You can never find this kind of returns on any investment in any part of the world besides Pakistan and specially in Karachi, it was simply amazing!. This returns came up only in 60 days time. These all positive thing happen at same time and create very positive scenario.
As mention earlier many times, whenever market give this kind of returns, it become more speculative and investors make it more fast and every one want to buy and no one is seller, and because of this massive buying sentiments, more speculators enter in the market and market become over bought situation, which always be risky for any market. People buy property without having full payment in hand, and had plan to resell before making full payment, and whenever this happen, market become more risky and instantly it can come down. And this time also this happen and after making new highs and become over all full bullish it starts coming down and all of sudden it fall down by 10 to 20 % with in 2 weeks time. (Mid November to End November 2015).
Now again we can say, 2015 was amazing year for Real Estate industry, it gave full chance to make money, and within the same period, it retrace again and market gave another opportunity to new buyer to buy at lower level. Now here one more thing shows that market follow the technical move amazingly, as our previous forecast I mentioned that, if market follow the previous theory of Decade Cycle, it will complete the bullish move in 2015, which was started since 2011, and downfall in 2015, and according to that theory market has due to fall down in 2015, I mentioned in one of my article, written in 2012, that market will go up continuously, make new high and fall down in 2015, it was amazing and it has been proved, that previous moves always very help full to make analysis. (History repeats itself). This is very old saying to analysis any market and it has been proven already, as this time it happen again and history repeat itself.
Now after this downfall market again tried to recover and started again moving up little bit and try to cover that 10 – 20 %, now the question is what will happen again? As whenever market drop down many stake holder try to cover it up so quickly and it happens all time, but it difficult to judge that this recovery of prices is real or artificial. Because this recovery seen in only few categories and not over all.
As we are in the middle of first quarter 2016, now it is quite difficult to forecast at this stage that what exactly happen in the market. Either it will cover up completely or remain stable or further drop down. According to my personal opinion this 2015 move has been completed and market will not take any major move on upside, further if we see last four year cycle of DCK, it moved yearly basis and according that market will keep slow this year. Although for long term investor it is fine to buy at this stage too, but if any one want to invest to get returns with in the same calendar year, it might not be feasible.
Further as when it was on high demand and BTK was dull so it created impact, so now when on other side BTK is starting moving up and it feels that there is price gap and because of this DCK price move, price difference in both increased, and BTK looks under-price, instead of very high pace of development work. One other reason of high development in BTK is that there are ready production options are also available, and many things are very close to its completion, but in DCK we only have open plot option and only Sector 3 will be ready by mid 2016 for possession. Farm houses are also a separate enclave and it will also take more than 2 years for completion. Because of all these factors, it look like that 2016 will be another good year for Real Estate investors, but not in DCK, this time it will happen in BTK.
As these prices given after long time (4-months) in this period price came up first, then as mention it goes down in November, than again it try to cover up that dip, so here we are trying to give you the current price ranges after the completion of January 2016.
Total Price of Plot (February 2016):
Total Price for Residential and Commercial Plots in DCK for the month of February 2016 are as follows:
- 200 Yards (Residential): PKR 36 to 65 Lacs
- 300 Yards (Residential): PKR 42 to 80 Lacs
- 500 Yards (Residential): PKR 65 to 110 Lacs
- 1000 Yards (Residential): PKR 115 to 150 Lacs
- 2000 Yards (Residential): PKR 175 to 225 Lacs
- 200 Yards (Commercial): PKR 125 to 280 Lacs
Note: The above mention plot prices are total accumulated prices and as DCK plots are sold on installment basis, so the remaining installment will be deducted from the full price at the time of full payment. Remaining installment could vary in different categories of plot and also could vary on individual client basis, some paid up to date and some paid less installments. This price means the total plot cost after making the full payment including all the remaining installments.
Total Amount = ON Amount + Booking Price
Price range varies according to Sectors and Sub-sectors. Map issued sectors will also follow the particular Location, Corner/Non-Corner, Small/Big Roads, Park Facing etc.
Market has moved already a lot, and produce huge profits for stake holders, now at this stage it seems to become slow and will not make major move on upside, although there is capacity of going down, as market already touched its life time high in November 2015, and technically there is space of coming down.
As my previous forecasts (2012/2013), I mentioned this thing that market will touched its peak prices in the year 2015, and after completing this cycle, market will change its pace, although this is technical study of Real Estate Market (Decade Cycle Theory) it might follow this time too, very interestingly many times to support this technical move there are many fundamentals created at the time, and it is done in this way. Although this study particularly applicable for DHA Phase VIII, and it happens many time in the history, but impact of this also make difference for DCK.
Although DCK launched in 2009 and actually trading starts in DCK from starting 2011, so it is only five years ago today, in these five years it was initial three years was of bullish move overall, (2011-2013), than one year of slow move and dip in the market, (2014) than again 2015 proved one more promising year for DCK, so now according to this equation it will be slow year for DCK.
In Budget 2015/16 they imposed with holding tax (0.6%) on all banking transactions, (for non filers) which creates many difficulties not only for real estate deals but all other business activities, and traders faced many difficulties to make the payments. As this tax was already there on cash transaction at the rate of (0.3 and 0.5 %) for filer and non-filer, and before that few years back it was imposed on pay-order too, it was started from 0.1% and reach till 0.3%. After that it was removed.
Now this time, this tax was introduced on all banking transactions, either Cash/Pay-orders/Cheques or even online transaction. It created real difficulty. Many groups of business community try hard on this issue for permanent removal of this or at least decrease, but government is stiff on this issue, although now this thing has been in practice and people observed this thing.
Market will remain stable in first quarter of 2016, and no major changes expected in this time frame, it is not recommended for short term investors, who want to make quick money, but as always recommended from my side that Real Estate is game of long term and always beneficiary for those who can wait for some long time. we can see the maximum benefit in this market only for those who can hold the position for some long time, and traders only catch 25 to 50 % of whole move, as during selling and again buying you will lose big stakes.
For example who keep the plot since 2011, price multiply ten time even in some category, and minimum five times in this five year, it produced 100 to 200 % per annum. And trader could not take this advantage.
Although this year is important for DCK as first sector possession will be handed over in this year, as they are planning to make ready sector 3 by June 2016. So it might create some positive move on this news and particularly at that time.
These prices are provided by Mr. Muhammad Shafi Jakvani, CEO – CITI Associates. Above mention prices are subject to change any time according to their demand & supply and price can be changed either side in the open market, depend on the volatility of the market. And there is no guarantee of any kind of price variation.
Mostly files traded in the size of 200, 300 and 500 square yards. It does not mean that other categories are not available, but normally these sizes are traded and are available for sale and people are ready to buy files of these sizes. Other large plot may be allotted in balloting but not available frequently in the market.