Property Market Report: Karachi, Islamabad See Decent Gains, Lahore Remains Stable In First Half Of 2015

Property Market Report: Karachi, Islamabad Se Decent Gains, Lahore Remains Stable In First Half Of 2015 | PakistanTribe.com

Property Market Report: Karachi, Islamabad Se Decent Gains, Lahore Remains Stable In First Half Of 2015  | PakistanTribe.comISLAMABAD – When real estate values refused to budge in 2014, all hopes were placed on the upcoming 2015 to bring along some momentum to the real estate sector. That much-needed activity in the real estate market has arrived, though in part, in the first half of 2015.

In almost all of Karachi and Islamabad’s popular localities, prices went up over the course of January 2015 to June 2015 according to data from Zameen, Pakistan’s top property portal. Lahore, however, continued to see slow activity and stagnating values, with a lethargic overall feel in the market.

However, this should not be worrying. When investors tend to focus their energies and capital on Karachi, a relative decline in Lahore’s property market is often temporarily the result.

On the bright side, there are several new projects on the cards in Lahore, including the 60,000-kanal LDA City and the 40,000-kanal DHA Phase IX. These and other developments are widening the pool of investment opportunities in the city, which should help steady its property market in the long haul.

For both houses and plots, Defence Housing Authority (DHA) was the most popular developer in all three cities in the first half of 2015 according to Zameen’s stats.

LAHORE

Lahore’s real estate market had a largely stagnant first half of 2015. One of the city’s top localities, Lahore Cantt, registered a 9.29% decline in prices over the course of the six months from January 2015 to June 2015. Meanwhile, DHA Lahore, Bahria Town and LDA Avenue I all remained stable.

DHA Lahore’s average rate for 1-kanal plots went down by only a slight 1.02% in H1 2015. With a 3.26% gain over a 6-month period, Bahria Town’s 1-kanal plot rates managed to remain stable and similar stability was seen in LDA Avenue I, where the average price for same-sized plots went up by a negligible 1.05%.

While Johar Town continued to offer one of the highest rental yields in the city at 4.26%, DHA Lahore and Lahore Cantt remained the more expensive neighbourhoods despite the relative downturn. On average, a 1-kanal house in the localities cost PKR 37,518,561 and PKR 36,875,623 respectively.

 

MOST POPULAR LOCALITIES FOR PLOTS & HOMES IN LAHORE | H1 2015

PLOTS

  1. DHA Lahore
  2. Bahria Town
  3. LDA Avenue I
  4. State Life
  5. Bahria Orchard

HOMES

  1. DHA Lahore
  2. Bahria Town
  3. Lahore Cantt
  4. Johar Town
  5. Askari

ISLAMABAD

Three out of the four popular localities in Islamabad saw decent gains, with Bahria Town the only top locality to post a negligible drop in prices over the course of H1 2015. Given how miserable the second half of 2014 was for Islamabad, this was a good turn-around performance on the whole.

The moderate yet promising growth in Sector F-11 and DHA Islamabad was shown by the 6.05% and 6.96% increases in prices of 1-kanal plots respectively. The first half of 2015 also witnessed a moderate growth of 6.39% for prices of same-sized plots in Sector E-11. Bahria Town, however, remained stable with a slight dip of 1.20% in prices of 1-kanal plots in the first half of the year.

Sector F-11 was one of the most expensive areas for 1-kanal houses in Islamabad in H1 2015 with an average price of PKR 68,254,393. Sector E-11 followed close behind with PKR 62,960,942 for a 1-kanal home on average. Meanwhile, despite the slight dip in average prices, Bahria Town offered a high rental yield at 4.35%.

MOST POPULAR LOCALITIES FOR PLOTS & HOMES IN ISLAMABAD | H1 2015

PLOTS

  1. DHA Islamabad
  2. Bahria Town
  3. Sector B-17
  4. Gulberg Islamabad
  5. Sector G-14

HOMES

  1. DHA Islamabad
  2. Bahria Town
  3. Sector E-11
  4. Sector G-11
  5. Sector F-10

KARACHI

With investor focus squarely on Karachi for several months now, the city’s top localities have seen decent gains in prices as well as a bustle of activity despite Ramadan and the deadly heat. Gulshan-e-Iqbal and DHA City Karachi saw good price rises, while DHA Karachi and Bahria Town also posted healthy gains to round off a very encouraging overall performance.

The prices of 500 square yard plots in DHA Karachi showed a restrained – by Karachi standards – growth of 6.09% over the course of the first half, while Bahria Town Karachi posted a very healthy 9.85% increase in prices of same-sized plots. Rates went up in Gulshan-e-Iqbal by 12.36% and by 12.23% in DHA City Karachi, which was indicative of good, controlled growth in H1 2015.

DHA Karachi was one of the costliest neighbourhoods for homes in Karachi with an average sale price of PKR 58,910,586 for a 500 square yard house. While Gulshan-e-Iqbal managed to offer a relatively higher rental yield at 5.01%, its average price for a house of the same size was PKR 37,415,863, well short of DHA Karachi’s sky-high rates.

MOST POPULAR LOCALITIES FOR PLOTS & HOMES IN KARACHI | H1 2015

PLOTS

  1. DHA Karachi
  2. Bahria Town Karachi
  3. DHA City Karachi
  4. Gadap Town
  5. Gulistan-e-Jauhar

HOMES

  1. DHA Karachi
  2. Gulshan-e-Iqbal
  3. Gulistan-e-Jauhar
  4. North Nazimabad
  5. North Karachi

ANALYSIS

The highlight of the first half of 2015 was obviously the continued growth of Karachi’s real estate market. Even though Lahore’s property market seems to be going through a bit of a downward phase at the moment, a burst of activity can be anticipated post-Ramadan, and the same goes for Islamabad. So, those who have invested in Lahore and Islamabad should not lose hope at all.

Lahore’s slow performance could be attributed to the announcement of a major addition to the city’s road infrastructure: the southern loop of Lahore Ring Road. It is rumoured to be paving its way through several housing societies, which has led to a general anxiety in the market that might have limited investment activity in the city. Investors have held on to their capital more so because the final route has not been formally revealed yet.

“Since a lot of Lahore’s major real estate investment avenues such as LDA City, LDA Avenue I, DHA Phase IX, Bahria Town, Lake City and Fazaia Housing Scheme et cetera are located along the city’s southern edges, this uncertainty over Lahore Ring Road’s route might be the reason why Lahore’s market seems to be at a standstill right now,” said Zameen CEO Zeeshan Ali Khan.

“But the real estate markets of Karachi and Islamabad seem to be doing well and, barring any major disruptions, they should continue down that road in the second half of 2015,” he added.


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