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Real estate hit by political uncertainty - Naveed Yaseen - 04-26-2009 06:40 AM
By Moonis Ahmed
KARACHI: As uncertainty continues on the political front in the country, the builders and developers are finding it hard to attract investment, industry sources told Daily Times.
They said that the most of the builders and developers who came back from Dubai and others Gulf states recently have started to launch projects which they left incomplete and are offering attractive packages to lure investors.
“Despite the forecasts that the economy is on the road to recovery, the real estate business is still facing hard times in the country,” they added.
Babar Mirza Chughtai, Chairman, Association of Builders and Developers said that property business has lost steam and has failed to attract fresh investment. During some last months many projects have been launched but the builders attributed it primarily as a part of the strategy to avoid encroachment on empty plots by the land mafia.
The builders, who had introduced new projects, were forced by the situation in the city to start some activity on such plots like opening offices, developing the land or posting some security guards at the site in order to secure the land.
About falling steel and cement prices he said that are these not the main issues that could brighten hope among the investors. Actually, investors of real estate are looking forward for a pleasant business environment to invest.
These two items hold 50 to 60 percent share in the overall construction cost of any apartment project or a house.
He said that government housing schemes in last 25 years like LDA, Awami Ghar and others failed to provide any relief. “Continuous political instability coupled with law and order situation are discouraging investors and public to take risk in the real estate business,” Muhammad Asim, director sales and marketing at World Link Real Estate said.
He was of the view that builders are trying to recover their lost confidence from the people by launching new projects and they are offering attractive packages.
Many people, who are trying to own a home after fall in property prices are finding it hard to make some saving as rising cost of living caused by high food inflation and utility bills are eating up their entire hard earned income, an expert said. It is pertinent to mention that the country, at present, is facing a shortfall of 6 million housing units. A leading cement maker and exporter said that sale of cement has declined by 15 to 20 percent in the last one-and-a-half-month as economic conditions have hit the construction activities. However, all the realtors were of the view that the prices of property would further drop in case the political situation remains unstable.
http://www.dailytimes.com.pk/default.asp?page=2009\04\26\story_26-4-2009_pg5_7