KARACHI: After recording a mounting price trend throughout in 2013, real estate sector of the country took breather as property prices remained stable across the country in first quarter of 2014 (January –March), said Pakistan’s largest property portal Zamen.com.
Zameen.com’s statistics available with Daily Times shows that plots and homes’ prices in three major cities of country included Lahore, Islamabad and Karachi stayed nearly intact while rental prices crosswise key areas of the three major cities too did not see any extraordinary vertical variation. Being a keen observer of country’s real estate dynamics, Zameen.com’s CEO, Zeeshan Ali anticipated that the market is likely to remain unchanged in the second quarter of 2014 excluding some selected areas where prices may continue to inch up. “The second quarter is likely to be a quieter period compared to last year, but we’re expecting better activity in the third and fourth quarters of the year,” he added.
However, some industry experts, in the wake of recent descending forex variations of green beck against Pakistani Rupee sees rapid spike in property prices in the offing especially in Karachi market where the investors seem persuading to recover huge losses occurred in latest US Dollar phenomenon by investing in real estate sector which traditionally recognized as key source of prosperity for the market players.
City wise breakup reveals that Karachi’s real estate sector, which stole the limelight towards the end of 2013 with a flurry of activity and new projects, recorded a few dips here and there but largely remained on the up.
In Defense Housing Authority (DHA) Karachi, 480 square yards plots registered a 6.40 percent rise in prices in the first quarter of the year.
Residential plots of the same size in Gulshan-e-Iqbal stood same as year ended 2013 at an average price of Rs 19.50 million.
Plots in Gulistan-e-Jauhar lost around 9.09 percent of their value in the same duration, however, falling from Rs 9.9 million per 500 sq yards in early January to around Rs 9,000,000 at the end of March 2014. Home prices recorded steadiness in Gulshan-e-Iqbal showing a modest increase of only 3.27 percent in homes’ value in said period.
Demand in Lahore dropped significantly in first quarter 2014 as compared to same period of 2013 resulting in dull activities right through the said period which led to stable property prices.
Homes in Lahore fared better than residential plots in terms of price appreciation as one-kanal houses saw 4.08 percent increment in Defence Housing Authority (DHA).
A comparison of average rents in DHA and Lahore Cantt revealed an interesting development on the rental front in Lahore.
Cantt, which is generally a more expensive area to rent a 1-kanal home, lagged behind DHA during first quarter of 2014.
Zameen.com’s statistics showed that the average rent for 1-kanal houses in DHA – Rs 118,758 in Q1 of 2014 – was 5.85% higher than houses of the same size in Cantt, where the average rent was Rs 112,195 during the same time period.
The average rental yields for 1-kanal houses in DHA and Cantt were 4.27percent and 3.83 percent respectively in Q1 of 2014.
Meanwhile, helped along by some modest price appreciation and sharp increases in rent, Johar Town boasted a staggering 5.26% rental yield during the same period of time.
Those looking to invest in houses for a steady stream of rental income should take note of this. Islamabad property market sees slight fluctuation
Property prices in Islamabad also had a bit of a dry spell in the first quarter of 2014. Most of the Capital Development Authority (CDA) sectors, which were very popular in 2013, did not manage to register impressive appreciation.
In fact, some of the most notable areas registered a fall in prices.
E-11 exhibited a downward trend with a 4.85% fall in the prices of 1-kanal plots. Interestingly, however, prices of same-sized plots in F-11 told a different story, registering an increase of 14.10% and providing further evidence that there was some upward activity in selective pockets of the Federal Capital despite a relatively sluggish market. Homes, on the other hand, have had a much better 2014 across the board so far.
Zameen.com’s statistics showed that 1-kanal homes in F-11, G-11 and E-11 saw price increases of 15.36%, 10.44% and 5.56% respectively.
From among the three most popular CDA sectors, E-11, G-11 and F-11, the first emerged as the most economical place to rent a 1-kanal home, with an average rental price of Rs 167,475 in Q1 of 2014 and an estimated rental yield of 3.46%. Rents for residential units of the same size hovered around the Rs 185,000 mark in F-11 during the first three months of 2014, and with increasing prices and steady rents, Zameen.com’s data showed a gradual drop in the sector’s rental yield.
One-kanal homes in G-11 fared slightly better in terms of rent thanks to steady, albeit minute, increases. The sector boasted an average monthly rent of Rs 171,889 in the first quarter and a steady 3.61% rental yield.
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