Lahore Real estate business slumps as rates remain stagnant in 6 years

[Salman]

LAHORE – The four percent tax on transfer of property, banks high interest rates, rapid policy change, ever-soaring inflation and political instability in the country have kept the dealers and land developers away from real estate business, dealers said.
“There is slump in real estate market as the rates of properties in almost every society are same for the last six years. However, there is some exception in DHA and Behria Town where situation is comparatively better as prices are inching up there during last two years, said Tayyib Khalil associated with Property Express.
According to him, domestic real estate sector is facing tough time as banks do not prefer to lease properties owing to economic destabilization. He stated that political instability together with worse law and order is discouraging investors to take risk in investing property, forcing them to keep their money in banks on up to 14 percent markup.
Sometime ago, investing in real estate was considered one of the most profitable businesses, especially commercial property, he added. He said that the returns were undoubtedly high before 9/11 incident, as the prices hike almost on daily basis.
“One day you bought any commercial property and the next day its value increased. You only needed to be careful about the location, high quality construction materials and the market rate of particular property that you were going to purchase,” he said. He said that commercial as well as residential real estate business was risk free and profitable. The property trade in Lahore was always a good investment option, as this property could generate immediate cash flow for the investors, while its value could also increase by many folds.