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Land speculators active again

By Hamid Waleed

LAHORE: Speculators are active in real estate sector again, inching up file and plot prices after Eid.

Market analysts say positive vibes have begun to hit real estate offices as upward trends boost investment hopes. When asked how investors could come to the market when markup rates have increased manifold and foreign investors are shying from taking fresh positions, analysts said it depended on speculators’ behaviour.

Real estate prices had suddenly risen after the October 8 earthquake, especially in the Defence Housing Authority’s (DHA) phases VII, IX and X, when some real estate gurus allegedly manipulated the market.

As a result, the file prices in Air Avenue, Central Park, Eden City Zone I, II and III, Formanites Phase I and II, Green City, Paragon City, Park View, Punjab Cooperative, State Life Phase I and II, Sui Gas Phase I and Bahria Sector C also increased between October 10 and October 15, and then declined to their original levels as the speculators offloaded their files, causing heavy losses to investors.

Market sources say some brokers pledged abnormal rates to file owners creating an artificial demand, giving an impression of foreign buying and luring genuine investors. “It was an artificial boom by leading brokers including some retired army men,” a broker said.

The market’s inactivity during the previous three months had led to the closure of 125 real estate businesses including the leading Kibria Estate and Variety Estate, and even Chohan Estate had decreased its staff, a source said.

Brokers were expecting a rebound after Eid. Market analysts say the speculators have started spreading the rumours of fresh investment marginally increasing prices on Tuesday.

Mohammed Zameer, an analyst, said plot prices had started rising by the end of Eid holidays. “There are rumours of heavy buying in the market,” he said, adding, “We are not yet sure who will invest, but a change is expected soon.”

Leading real estate offices like Chohan Estate and Askari Estate are advising caution but admit a post-Eid buying spree. Seasoned analysts expect a rebound only on Defence Phase VII balloting after about two months. They deny immediate rebound and say the current buying is speculators’ manipulation similar to the one right after October 8.

High markup rates, the stock market crash, blacklisting of major property brokers, the GHQ’s cancellation of No Objection Certificates for schemes near the new airport and the expected new real estate tax in the 2005-06 budget have been causing the real estate market to suffer.

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