After witnessing bullish trend in property prices in posh areas of the city since the inception of PML-N government on June 6, the real estate prices have returned to old levels from first week of this month.
Estate agents claimed that rates went up from June to September in Gulistan-e-Jauhar and Gulshan-e-Iqbal, while in some towns like North Nazimabad, prices remained pegged at the old levels in the same period.
Estate agents appeared divided, with some insisting that correction came in shape of slight decline in prices in DHA and Clifton areas while others believed that status quo had been prevailing in prices in posh areas from early September.
The agents also gave different views when it came to posh areas and were reluctant in revealing exact increase in property prices since the Nawaz Sharif government came into power.
Syed Shahid Aleem
President Defence-Clifton Association of Real Estate Agents Syed Shahid Aleem claimed that property prices boiled up by 50-60 per cent from June to August but now the rates had reversed in the current month.
He said that brokers had warned many investors and genuine public to refrain in lifting property in posh areas. “Buyers suffered setback as they tried to cash their luck in property after pulling out their money from banks following the government’s decision of allowing bank accounts’ access to tax officials,” he said.
Abdul Wahab Parekh
Owner of Parekh Estate at Clifton Abdul Wahab Parekh said property prices had risen by 50-70pc from January 2012 to May 2013 and further went up by 20-25pc from June 6 to first week of September 2013.
“I do not agree that property prices have tumbled from second week of September, rather these are static now,” he said.
He said that the decision of allowing FBR officials to get access to bank accounts of people having Rs1 million turnover caused fear among people who pulled out money from the banks and started buying property and lifted dollar.
Wahab said in an undeveloped area of Phase VIII, the price of 500-yard plot is now priced at Rs15-17.5 million. In developed area of the same phase, the rate of same-sized plot hovers between Rs22m and 25m. A 1,000-yard plot in developed area of phase VIII costs at least Rs45m.
A 500-yard brand new double storey bungalow in Phase V, VI and VII ranges between Rs45-52.5m, while a double-storey brand new 1,000-yard bungalow is priced at Rs80-90m while in A-One category its price is Rs100m.
One of the factors that had been injecting life in property prices was the arrival of record remittance from overseas Pakistanis finding way in many areas including purchasing of property. Remittances in July-August 2013 rose by 7pc to $2.6 billion from $2.46bn in same period last year. Pakistanis remitted $14bn in 2012-2013 as compared to $13.1bn in 2011-2012.
Mohammad Shafi Jakvani
CEO CITI Associates at Clifton, Mohammad Shafi Jakvani claimed that property prices started crawling up from 2011 and witnessed further jump after the new government took over.
He said that market was expecting some increase in taxes in Budget 2013-2014 besides imposition of new taxes. Meanwhile, the market continued to spike till August 2013.
He said the real estate prices rose by almost 10-30pc in the first quarter of the new government in almost all sectors (plots, flats and houses) in areas like Clifton, Defence, Bahdurabad etc.
He was of the view that the real estate market has been in the positive trend for almost last three years and ‘it will continue this trend for another two to three quarters’.
He said the market saw correction in the last 15 days mainly in open plots sectors, where many investors traded plots.
On a daily basis of buying and selling of the plots, market took correction of around 5 to 15pc in open plot prices (un-developed areas) and came down.
For apartments and houses, it will be a while before the sales are affected as the prices tumble. The market will stand at those lower prices and then constructed property will be affected, he opined.
He linked the increase in prices to rising demand for housing units. The ever increasing population in the city generates almost a million unit demand every year. However, this demand remains unmet despite the development of new housing projects.
He added that migration of people within the city because of law and order situation also caused price increase in property. Besides, people are also coming from interior Sindh to Karachi while overseas Pakistanis are also active in buying properties for personal use or for investment purpose.
Owner of Johar Associates at Gulistan-e-Jauhar, Abdul Wahab said that plots, bungalow and apartment rates in Gulistan-e-Jauhar and Gulshan-e-Iqbal have risen by at least 10pc in the last three months but “it has nothing to do with the change in government.”
He said that genuine demand arrived as people were buying houses in safer areas of Gulistan-e-Jauhar. “It is also a good sign that land is also being purchased by the people,” he added.
Owner of Nazimabad Estate Mohammad Najib said that there were no ups and downs in prices of plots and houses in North Nazimabad area in the last three to four months.
This article was first published on the Business Page of DAWN Newspaper on 29th September 2013.