Property rates fall 20-30pc this year

[LRE]

Property rates fall 20-30pc this year



By Aamir Shafaat Khan


KARACHI, Dec 20: Real estate agents have offered mixed views on the impact of Mumbai attacks on the property prices. Some think that the prices of plots are intact, while others say these have declined by five to 15 per cent.

Dealers said that investors, who have already been avoiding in taking risk owing to uncertain political conditions prevailing since February 2008, have further become cautious after war-like situation with India.

Besides, cut in steel bar prices has changed the market scenario. Dealers said that the seller of a brand new house/bungalow is facing problem to get the required amount as buyers press him up for more bargains.

The property prices have declined by at least 20-30 per cent since January this year.

The February general elections, formation of a new government and the PPP-MQM alliance in Sindh had failed to lure the investors.

Owner of Pak Estate in Clifton Khan Zubair Shaheen claimed the prices of plots in the posh areas had been unchanged after Mumbai attacks.

“There are only genuine buyers and sellers, which can be gauged from the daily transaction of 8-10 files of plots and bungalows in the DHA office,” he said.

He said that the investors had ventured into rupee-dollar game in the last few months after surging prices of dollar instead of investing in property business.

Zubair said that even investors, who had dumped millions of rupees in Dubai booming market, had been facing problems in pulling out their capital.

He was of the view that property market might see some activity after the holding of Senate elections in March/April, 2009, but much depends on India-Pakistan relations.

Owner of Johar Associates in Gulistan-e-Jauhar Block 1, Abdul Wahab said that there had been no big buying/selling activity. “The plot and bungalow prices are still intact at pre-Mumbai incident level as investors are still watching the situation from the sidelines,” he added.

Owner of Parekh Estate in Clifton Abdul Wahab Parekh offered a different view by saying that prices of plots in posh areas had further fallen by 10-15 per cent after the lingering threat of war.

He was of the view that situation in property market had shown a slight improvement in the last week as very few investors, who have managed to pull out their investments from Dubai, are returning to real estate market. However, the market still lacks investors’ enthusiasm.

Chairman Clifton-Defense Real Estate Association Arif Malik said the prices of property had plunged after Mumbai carnage. He claimed that only three to four files moved in the DHA office daily.

He said a 2,000 sq yards plot in Phase VIII now sells at Rs16 million as compared to Rs17.5 million ahead of incident. A year-and-a-half back it was priced at Rs30 million.

Similarly a 1,000 sq yard plot in Phase VIII is available at Rs12.5 million. In good days it was hovering between Rs22-22.5 million.

He painted a bleak outlook for property market in 2009 in case the tension between India and Pakistan rises and uncertain political and economic conditions prevail in the country. He said to some extent the activity in property market is also linked with the good performance of stock markets. If investors will make profit from the bourses then they would be encouraged in investing their earnings in property, he added.

People and investors had made massive investments in booming real estate business in DHA and other areas like Gulistan-i-Jauhar following huge influx of home remittances during the period 2001-2005, which had pushed the property rates up by four to six times.

The imposition of two per cent capital value tax (CVT) two years back had also discouraged the investors to operate in the property market.

President United Defense Clifton Estate Agents Association Raja Mazhar Hussain said that the prices of plots and bungalows had further declined by five to 10 per cent after Mumbai’s attacks.

He said that the property market is likely to remain depressed in the first quarter of 2009 and it may recover later depending on the law and order situation. He added that worldwide property markets had collapsed as majority of deals are being done through mortgage but in Pakistan there is very negligible share of mortgage in housing sector.

Sale executive of Civic Associates in Gulshan-e-Iqbal Abdaal Magray said owing to lack of demand the price of plots and bungalows have further dropped slightly after the threat of war between India and Pakistan.

One-a-half-year back, a 400 sq yards double storey bungalow in Block 5 was selling at Rs17.5 million and now its price is Rs14 million. This price is still negotiable. He said people have virtually stopped buying and selling property.


http://www.dawn.com/2008/12/21/ebr7.htm