What’s causing price hikes in DHA Gujranwala?

Defence Housing Authority (DHA) projects have been keeping things interesting in realty markets all over the country. DHA Gujranwala, as our last market report revealed, is actually the one project that outshines all others when you look at the city’s realty market. This particular project continues to surprise many with constant and sharp price rises.

Looking at the price trends in the exclusive data Zameen.com maintains, I have noticed that property rates in DHA Gujranwala started to go up in June last year, just when the new budget was announced.

Here, the prices continue to inch up, despite the fact that it has not seen a heavy volume of trade. Moreover, it continues to perform well in a market where some people have diverted their attention to buying plot files instead of actual plots to avoid paying taxes. Typically, for projects where possession is available, buying property means you pay up a stamp duty, capital value tax (CVT), and advance tax, which is not the case for plot files.

Trade activity seen in DHA Multan and DHA Bahawalpur has pushed up rates in DHA Gujranwala. The former two projects have been officially launched, are undergoing development, and their land has been acquired. DHA Gujranwala, on the other hand, is yet to see its formal launch – but prices here continue to move in an upward trajectory.

Price Trends

In April 2016, the market rate of 10-marla and 1-kanal residential plot files in DHA Gujranwala was PKR 1,800,000 and PKR 2,800,000, respectively, and the rates at present rest at PKR 2,800,000 and PKR 4,800,000.

What we are looking at is a price rise of 71% and 56% for  1-kanal and 10-marla plot files. It is not just that the rates have been rising ever since, occasional dips were also noticed, but prices always bounced back.

The graph below can give you an idea of how price trends have twisted and turned during the last year:

Price trends for 10-marla & 1-kanal plots – April 2016- April 2017

Development status

Currently, there seems to be no indication that the project will be launched in near future as the authority is still working on acquiring land but we can only make wild guesses about what the DHA is up to when it comes to making such important decisions.

According to sources, more than 15,000 acres of land has been bought for DHA Gujranwala and the process, despite its slow pace, is still ongoing. While I believe that available land is enough for DHA Gujranwala to launch its first phase, but there may be some hurdles to do it just now.

Some believe that delays seen in DHA Gujranwala official launch are a result of the authority’s focus on DHA Bahawalpur. There are people who believe that the block DHA Gujranwala is seeing in terms of related development is due to the early launch of DHA Bahawalpur and somewhat robust trade activity that demanded similar action in DHA Multan.

What to expect?

Looking at how the rate of DHA Gujranwala files has been inching up, I have a feeling that the phenomenon will continue for a while and may take a breather meanwhile and move further up towards the end of the year. This assessment rests on the fact that price appreciation without any on-ground activity could also be a signal that some major development is in the making.

So should you buy these files? Many property agents and experts will recommend you do so. And this makes all the sense to me to as there is  a lot of room for DHA Gujranwala property files to gain in value. Let’s see how the year closes for this project.