As a slowdown remained underway in the property markets of Lahore and Islamabad because of Ramadan and the Annual Budget, Karachi’s real estate market continued to show good activity and growth.
According to Pakistan’s top real estate portal Zameen.com, numbers from May 2015 show that the trend seems to have continued more or less as it was in April 2015, with small improvements in Islamabad and a further decline noted in Lahore. Karachi, meanwhile, posted even stronger numbers in May 2015, indicating that though the city’s real estate market might wind down come Ramadan, it has shown zero inclination to do so ahead of the holy month.
With the Annual Budget bringing no relief from the taxes imposed and increased last year, the real estate sector’s stakeholders must now look to make the best of this situation. However, tax breaks on certain construction materials and tax exemptions for builders and developers might spur construction activity and incentivise the launch of new projects over the next few years.
Meanwhile, Zameen.com’s search trend stats showed a marked increase in searches for DHA Lahore property – from 21.95% of all searches for plots in Lahore in April 2015 to 27.50% in May 2015 –mostly driven by the balloting of DHA Phase IX on May 15. This latest phase of DHA Lahore spans 45,000 kanals of land and offers 5-marla, 10-marla and 1-kanal residential plots. Please read on for detailed price and search trend figures from the country’s three major cities.
LAHORE
If April 2015 was slow for Lahore, May 2015 was a downright crawl for the city’s real estate marketby comparison, where all of the major localities saw downward trends. Propped up by Phase IX’s balloting, DHA Lahore managed to keep its prices stable ahead of Ramadan with only a negligible 0.29% drop, but notable price dips were seen elsewhere in the city.
Lahore Cantt’s 1-kanal plots saw prices drop another 1.02% in May 2015 after a similar drop in April 2015. Prices of 1-kanal plots also continued to decline in Bahria Town, with a 3.48% drop in May 2015. LDA Avenue I also suffered a 3.04% decline in the prices of its 1-kanal plots in May 2015.
DHA Lahore remained a highly expensive neighbourhood to buy a 1-kanal home in Lahore, with average prices hovering around PKR 36,351,000. Lahore Cantt was also in the same ballpark with a 1-kanal home costing PKR 35,706,000, while Johar Town offered the best rental yields at 4.51%.
TOP 5 LOCALITIES FOR PLOTS& HOMES IN LAHORE | MAY 2015
PLOTS
1. DHA Lahore
2. Bahria Town
3. State Life
4. LDA Avenue I
5. Bahria Orchard
HOMES
1. DHA Lahore
2. Bahria Town
3. Lahore Cantt
4. Johar Town
5. Askari
ISLAMABAD
Islamabad’s real estate market had also had a slow April 2015, but unlike Lahore the Federal Capital’s market showed a bit of improvement in May 2015, though still nothing close to a stellar performance. Sectors F-11 and E-11 continued to show growth with a 2.51% and 1.16% rise in the prices of 1-kanal plots in both localities respectively.
Meanwhile, Bahria Town Islamabad/Rawalpindi showed stability in May 2015 with a negligible 0.46% rise in prices, which came on the heels of a price drop in April 2015. DHA Islamabad, however, continued its downward trend with a 1.48% drop in 1-kanal plot prices in May.
With an average sale price ofPKR 66,927,000, Sector F-11 was one of the priciest sectors to buy a 1-kanal house in Islamabad, followed by E-11 with a marginally lower average sale price of PKR 63,152,310. Bahria Town managed to offer the highest rental yield, i.e. 4.40%.
TOP 5 LOCALITIES FOR PLOTS & HOMES IN ISLAMABAD | MAY 2015
PLOTS
1. DHA Islamabad
2. Bahria Town
3. Gulberg Islamabad
4. Sector B-17
5. Sector G-14
HOMES
1. DHA Islamabad
2. Bahria Town
3. Sector E-11
4. Sector G-11
5. Sector F-10
KARACHI
Karachi’s real estate market built on a strong overall performance in April 2015 to post good overall numbers in May 2015 as well. DHA Karachi was top of the list once again, and DHA City Karachi also exhibited a healthy rise in prices in May 2015. None of Karachi’s other prominent localities experienced a drop in prices either.
For 1-kanal plots, DHA Karachi’s average prices showed a healthy 4.57% boost in May.A controlled 2.76% risein prices was also seen in DHA City Karachi, while Bahria Town Karachi’s 1-kanal plots gained 1.96% in value on the back of solid onsite development work.Gulshan-e-Iqbal’s 1-kanal plots gained a modest 1.33% in May after a more solid 2.64% gain in April.
The average prices of 1-kanal houses in DHA Karachi hovered around PKR 55,340,685. In Gulshan-e-Iqbal, same-sized houses cost PKR 33,868,133 on average. Gulistan-e-Jauhar, meanwhile, offered a good rental yield of 4.40%.
TOP 5 LOCALITIES FOR PLOTS & HOMES IN KARACHI | MAY 2015
PLOTS
1. DHA Karachi
2. Bahria Town Karachi
3. DHA City Karachi
4. Gadap Town
5. Gulistan-e-Jauhar
HOMES
1. DHA Karachi
2. Gulshan-e-Iqbal
3. Gulistan-e-Jauhar
4. North Nazimabad
5. North Karachi
ANALYSIS
The three major real estate markets of the country seem to have consolidated their positions month-on-month from April 2015 to May 2015. Lahore’s market continued to wind down and Islamabad’s was a bit of a mixed bag, while Karachi’s market carried forward its solid performance.
All in all, the first half of 2015 seems to be heading towards a stable close, and numbers from the next month will show how much growth has been seen in the real estate markets around the country. Next month’s stats will also be indicative of the full impact of Ramadan and the Annual Budget.
“It is nice to see that Karachi isn’t showing any signs of slowing down as yet, but next month’s numbers will present a more accurate picture, which is when we will be able to gauge if Ramadan will have its usual seasonal effect on Karachi this year or not. My advice for stakeholders would be not to panic in case of any sudden price drops,” said Zameen.comCEO Zeeshan Ali Khan.
“Investors should patiently bear this temporary downturn in Lahore, which won’t last long in my opinion. The same applies to Islamabad if it starts to exhibit similar trends, which would be perfectly in keeping with this time of the year. Eid-ul-Fitr should bring with it significant activity when overseas Pakistanis come home for the holidays, and that should help prices get back on their feet in H2 2015,” he added.