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No buying, selling as property rates in big cities remain stable - Salman - 04-23-2014 02:47 PM
No buying, selling as property rates in big cities remain stable
LAHORE - Property prices remained stable across three of the country’s major cities during the first quarter (Q1) of 2014. The property markets of Lahore, Karachi and Islamabad, which had registered increases in prices throughout 2013, were lukewarm during Q1 of 2014 with little buying and selling activity.
Statistics show that prices for plots and homes in Lahore remained largely consistent with only minute increases and decreases during the first quarter. Property values in Islamabad and Karachi, too, showed a similar trend, where key areas performed consistently in Q1. No significant changes were noticed in the trajectory of rental prices across key areas of the three major cities. The property market for plots in Lahore had an uneventful first quarter. Compared to Q1 of 2013, demand seemed to have dropped significantly in Q1 of 2014,signifying that not many buyers or investors were active in the market. Consequently, there were no major spikes seen in property prices in Lahore. In the first quarter of 2014, 1-kanal (500 yards2) residential plots in DHA Lahore showed a dip of 3.35%. Similarly, plots of the same size in Bahria Town registered a decrease of 3.93% in prices during the same period.
Homes in Lahore fared better than residential plots in terms of price appreciation, with 1-kanal houses seeing increases in value of 4.08% and 3.82% in DHA and Bahria Town respectively. 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 Q1 of 2014. Statistics compiled by Zameen.com showed that the average rent for 1-kanal houses in DHA – Rs118,758 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. Bahria Town, in contrast, was the most economical option of the three this quarter, with an average rent of Rs 87,667 for a 1-kanal house. The average rental yields for 1-kanal houses in DHA, Cantt and Bahria Town were 4.27%, 3.83% and 4.11% respectively in Q1 of 2014.
Property prices in Islamabad also had a bit of a dry spell in the first quarter of 2014. Most of the 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. Bahria Town and E-11 exhibited a downward trend with a 4.85% and 0.61% fall in the prices of 1-kanal plots respectively. 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. 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 Rs185,000 mark in F-11 during the first three months of 2014, and with increasing prices and steady rents, 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.
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 DHA Karachi, 1-kanal plots registered a 6.40%rise in prices in the first quarter of the year. Even though this seems like a small percentage, translated into actual numbers it represents a tangible increase in prices for DHA properties
Source : http://www.nation.com.pk/business/22-Apr-2014/no-buying-selling-as-property-rates-in-big-cities-remain-stable