I have heard from some sources that prices are about to rise in Pakistan. I just want to make sure is it true or not.
Prices are no doubt moving up but the main reason is rupee devaluation and property dealers who are now investors. One plot is sold 4-5 times but no construction. In G-13 and G-14 there are rapid constructions and prices are going up because limited plots are available but in societies like G-15,F-15 even Bahria DHA no major construction.
Aleena,
Price of property is rising in Islamabad its a face but not the whole Islamabad however in some specific areas.
i dont think so we can call this a property rise, infact this is an inflation rise as the value of ruppee is falling. Things are still the same. The only thing that matters is that me or any other earning person has the same income owing to prices of commodities going up and Ruppee value going further down. So property prices remain the same people.
I agreed with Muzammil. There are very few genuine buyers in G-13,G-14. The prices no doubt are not stagnant but we can not say that prices are rising. But activity is also there. The main reason of little bit increase is rupee bahadur. About 8% rupee devaluation will definitely affect the market.
BTW there will be no major change in prices in next few months due to political unrest and election year. The last increase in G-14/4 prices is also due to Gas connections but I think pipes will start blowing whistles in near future. There is no gas in winter in most part of city.
Although Pakistan real estate is going through turbulent times, still it has enough potential. Although the prices of properties are escalating steadily but the demand is also surging simultaneously, and that surly means that still there is potential.
Dear,
This is a time to invest money in real estate. In April, market will start rising day by day.
Try best to buy commercial!
It means not only the commercial plots but the residential area plots are also going to face rise in price ??
In my opinion there are no economic indicator which we may contributor to prices increase in pakistani property market the only reason I can understand is that most of the properties are controlled by few and they run the show. These guys are smart and mainly they want to milk foreign peoples as much as they can.
I've been to Karachi and I have seen some of the properties were sold at very reasonable prices directly by the home owners to buyers but if we contact from out of Pakistan they prices they state are always are very high and always advise that prices are going up..... In fact not in real terms as there are no indication neither Pakistan economy or political structure or stability getting any better.
Our smart invested clearly understand that due to rupee devaluation they can take the advantages from the foreign buyers. I wonder anyone agree with me.
Dear Akram i like your analysis but this is not the only reason. Its a fact that real estate is down these days there was a boom in Musharraf Era and what you said that was exactly happening in that ERA. Cant say anything about whole country but in Islamabad and specially in some specified areas of Islamabad there is a good change in real estate. Not only that investors are involved but there are few other reasons like day by day construction cost is rising people are trying to buy a plot and construct after that development works begin in few new sectors, Rents are very high now a days so its also playing a role in prices. Rupee devaluation is also a big factor.
Muhammad Akram mention a good point.By Searching on net you don’t get the real idea of Pakistan real estate market.Talking about karachi market,there is no real activity on large scale or by trend.Just individual selling/purchasing going on and the increase only shows in some areas like Defence,Clifton,PECHS,Karsaz and some others,which is always considered peaceful and free of any political clash points.In case of Defence,its get the worst hit after boom down as much as 40% so about its current increasing we can also say its market correcting itself.By all market analysts,nobody expect any real change before mid of 2013 till that market continue its current trend.
Agreed with KK and Akram shb. In Islamabad currently G-13 and G-14/4 are the only options where little bit activity is going on. The asking price by the dealers is increased by 500,000-1,000,000 in last few months but these plots are still not sold. In last few years there are tens of societies and thousand of plots came in market. If we visit these societies we see there are thousands of plots still available for sale. In next few years Bahria Enclave,B-17,RP.F-15,F-16,F-17 are also ready for residence. I wonder this will fill the gap of demand-supply.. The strong societies with the help of very good marketing creating hype and increase artificial prices. In B-17 and G-13 I personally experienced this. B-17,F-15,F-16 will take at least 5-10 more years for residence and there are thousands of plots in B-17 but society is planning to increase its price.
@Kamran:Good to see you bro.Did you check Akram sahib another point??people quote the NRP higher price than the real market.I think when some free time we should make the comparison of real market price and prices people find on internet so especially NRP can save their some money.BTW karachi market is so dead that my 2 properties are on sale for 2 years and no buyer and recently i lost a great deal in Defence Phase 1 due to it.LUCK 
The prices may be rising a little due to inflation! In Pakistan inflation is a funny number … in the current times the inflation in Pakistan is more than 10% each year… while the prices of properties are not increasing at this rate to technically the property in Pakistan is devaluing every year!
I agree with most of the comments above. As a summary, I think following factors lead to change in property price, in Pakistan's scenario:
- Inflation (around 8-12% so take an average of 10%) or currency devaluation;
- Further development (like roads, availaibility of possession, utilities etc.);
- Brand equity (like DHA despite of lower in quality, and location access as compared to Bahria Rawalpiindi) is still priced higher);
- Demand - Supply fundamentals;
- Future potential or call it forecast or in some cases speculation or perception/hype created amongst people.
As a summary the first three factors are almost universal and understandable. However, in Pakistan we see step increases rather than gradual increase due to no. 4 & 5 (above) which are inter-related particularly in Pakistan's scenario.
Manifold increase in property prices in 2005-2007 happened due to extensive demand created by the foriegn remittances to Pakistan which need to sit somewhere. And in Pakistan property is the time tested arena for investment.
Pakistan's ever expanding population, relatively immature and smaller market size with varying development standards, and then people typicllay small investors follow the 'herd' mentality which creates the bubble in almost everything. And hence market correction what we have seen in 2008-2009. And last couple of years, we have seen stangnant market as nothing has triggered a boom. Rupee has devalued around 50% in last 4 years. Hence, upward adjustment is due and you can see prices creeping up where factors 2-4 are favorable for that specific society/property. At the same time, as commented above in other areas prices are not even escalated to compensate for devaluation resulting in loss of value for investors.
Broadly speaking, I see a major step increase will come in next 1-2 years. This can go as high as 30-50%, particularly for areas where price has not moved in last 3 years or so. It could be triggered by any event bringing back the confidence amongst investors (if it happens) or possibly gradual starting with the change in currently depressing political scenario.
Hope the above helps.
Further comments are welcome.