Pakistan’s Real Estate Market trend has been bullish for last 3 years, which started in the last quarter of 2010 and continues till today in almost all the major cities Pakistan. Prices have escalated by 50% to 300% in different sectors/areas of Real Estate. Particularly, this year prices jumped to almost double in different segments and in three quarters of 2013 (Jan to Sep) prices escalated 25% to 75%.
Though the last quarter seems looks dull, and prices may drop down to 5% to 15 % in particularly open plots and those undeveloped area where only the plot has been traded for the investment purpose only. This price fall has not yet effected the developed area and constructed property like bungalows or apartments.
Here are some of the trends that the Pakistani real estate market witnessed in 2013:
- Foreign investment in real estate increased by 10 to 15%.
- Construction costs increased by 20% and are expected to remain the same until the end of the year.
- Prices of built-up commercial and residential properties increased by 25 to 75%.
- Prices of vacant plots that showed a bullish trend till September 2013 have now started to decrease by five to 15%.
- Rental rates of residential and commercial property increased by 10 to 25% and are expected to increase by a further 15% within the next two months.
- The availability of newly built houses increased by 10% and is likely to increase by five percent by the end of the year.
- The establishment of gated communities increased by five to 15%, and many more are in the pipeline.
- Interest rates on home loans remained the same as last year and range between 14.3 and 14.8%
- The demand for, and value of, agricultural land increased by 15 to 20%.
Investment options that investors should consider include:
- Industrial estates located along the highways.
- Gated communities in Islamabad, Karachi and Lahore.
- Vacant plots (residential, commercial and agricultural) located at the outskirts of the major cities; these are ideal for long term investment.
This article is written by Mr. Muhammad Shafi Jakvani, CEO – Citi Associates. You can get in touch with him at email@example.com. This article was also published in DAWN Real Estate Advertiser.