Property prices fall by 8-15 per cent

[LahoreEstate]

KARACHI: Property prices, especially of vacant plots, have further declined by eight to 15 per cent during the last over two weeks as investors are still not ready to take risks in view of uncertain political and economic conditions.

Real estate prices had plunged by 20 to 30 per cent in 2008 and these further came down by five to 15 per cent after Mumbai attacks and subsequent tension between the two countries.

Estate agents attributed slow sale and purchases to reports regarding arrival of Talibans in Karachi.

Owner of Parekh Estate at Clifton, Abdul Wahab Parekh said after a price cut of 10 to 15 per cent, a 500-yard plot in Phase-VIII now ranges between Rs6 million and Rs7.5 million depending on the location.

He said the price of a 1,000-yard plot in the same phase hovers between Rs10 million and Rs15 million from fourth to eighth belt while the same bungalow from first to third belt is priced at least Rs20 million.

A 2,000 yards plot price ranges between Rs20 and Rs27.5 million from fourth to eighth belt while the same plot from first to third belt is available between Rs35 and Rs40 million.

He said a brand new bungalow price in Phase-V, VI and VII is now priced between Rs45 million and Rs50 million, while the price of a 500- yard bungalow ranges between Rs22.5 million and Rs30 million in the same phases.

A new 500 yards bungalow in Phase-VIII can be purchased at Rs20 to Rs25 million. Property transactions regarding plots and bungalows transfer at the DHA Office are hardly 10-15 per day.

Parekh forecasts a weak outlook of property market in the next five to six months in view of indistinct economic and political situations.

‘There have been compromises, clashes and verbal skirmishes among ruling parties, especially in Karachi, for almost one year,’ he said, adding that under such a situation no one would like to take risks in real estate.

He said many Pakistani investors, after reaping huge profits in the booming Dubai markets in good times, are now highly perturbed after the collapse of prices there.

Those who had purchased property here from their profits in Dubai are now selling their properties here to avert further losses in view of persistent fall in prices.

When asked as to where investors are now focusing, he said many small and medium-sized investors have either put on hold their investment plans in Pakistan or were focusing on banks and National Saving Schemes (NSS) due to good returns offered by these institutions, as they consider it a safe investment to some extent.

Despite a cut in construction cost after a sharp drop in steel-bar prices, investors are still cautious in putting up their money in various projects as they fear that environment for making investment is still not conducive.

Owner of Pak Estate, Khan Zubair Shaheen was of the view that prices of plots and bungalows have fallen by eight to 10 per cent in the last two months.

He said that the staff plot of 100 yards now sells at Rs2.4 to Rs2.6 million as compared to Rs3.1 to 3.2 million while 100 yards commercial plots in Phase-VII are being sold at Rs5.4 to 5.5 million as compared to their earlier price of Rs5.5-6.0 million. He added that only three banks (one private and two foreign) are offering housing loans as compared to 15 banks back in the good old days.

Owner of Johar Associates in Gulistan-i-Jauhar Block 1, Abdul Wahab, said that prices of plots and bungalows in blocks 13, 14, 15 and 16 have dropped by at least 10 per cent in nearly two months. He said a 240 yards plot in these blocks is now being sold between Rs7.0 million and Rs7.2 million.

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