Dear gurus,
The prices in isb are a bit declining, i'd say. Have you noticed that or it's just me? For example, 25x40 house price in g 13 and even d 12 has come down.
What's the reason and how do you see the price behaving in the next 6 to 8 months.
Thank you
Yes you are right only in G-13 and D-12 not in any other cda sector, the reason is that these sectorrs are not fully populated and some basic facilites not avalable. In other cda sectors no decline in prices but prices increases with the pasage of time
Also same trend in Bahria 1 to 6 and Enclave. Will the trend continue for 6 to 8 months?
Gurus! I am wondering what’s the reason? Is this the time to buy house in G 13 or D 12 or should wait?
There is not just population issue also water and security issue. Peak pricing in both sectors and less facilities so it will rise but slow.For investment point of view not a good option.
Regards
In Islamabad, prices have been declined even in F-11 (VIP) sector. A one Kanal old house used to sell above 7 crores but now the very same old house can be bought even at 5.5 to 6 crores.
The reason is, bad keep up, better options of esthetic lining available just in neighborhood, such as BTs, DHAs and even Gulberg Green if they play honest with boundary wall and honor other promises. Islamabad will always an edge of having school transport, an education sector, being capital but DHAs & BTs are galloping fast in horse race.
Well said AQ sab.This is what in my words.For living purpose Dha is No-1 and other hand Bahria is going well.I know some families who sell out properties in Islamabad and living in Dha and Bahria.My neighbor who is overseas rent out house in G-13 and living in Bahria.
Regards
I think renting a house in Bahria is much better and if you are buying, go for DHA. DHA will always survive for long term. FOr Bahria, we are not sure.
Good discussion and valuable insights from all gurus and fellow forumers that is well appreciated. It helps a novice like me to understand things and put them in a proper perspective.
However, with due respect I would like to differ 'Price Decline in ISB' is quite an over statement based on the data that is available. I guess, overall there may be a few cases of some fluctuations. To see it more objectively. I have looked into it to interpret based on the available data.
Disclaimer: The claims made here are purely based on the interpretation of data available at Source: Islamabad House Price Index (Aug 2018): https://www.zameen.com/index/buy/houses/islamabad/
Lets divide it into:
1. Houses in ISB - General and Overall Trend
- August 31, 2017 - Peak Price: 10217/sq. ft. approx.
- November 30, 2017 - Lowest Price: 9261/sq. ft. approx.
- August 31, 2018 - Current Price: 9709/sq. ft. approx.
Yes as per peak, last year this time prices have declined by 508/sq. ft. approx (-4.97%). However, since the lowest from last November prices have gained by 448/sq. ft. approx. (+4.8%).
We can say in last 12 months prices have declined by approx 5% but since last December recovery is in process with a gain of 4.8% approx. I would say it a market correction rather than a decline.
Biggest Losers during last 12 months (with decline more than 1%)
- E11 - 10 Marla (-2.41%)
- National Police Foundation - 10 Marla (-2.40%)
- PWD Housing - 10 Marla (-1.11%)
- G-11 5 Marla (-1.04%)
Biggest Winners during last 12 months (with appreciation more than 5%)
- DHA Phase 2 - 1 Kanal (+16.33%)
- DHA overall - 1 Kanal (+14.46%)
- Soan Garden - 10 Marla (+10.36%)
2. Residential Plots - General and Overall Trend
Overall appreciation with no decline lasting more than one month in a period of 12 months.
- August 31, 2017 - 3157/sq. ft.
- August 31, 2018 - 3410/sq. ft.
Overall no depreciation with an appreciation of 8.1% and 253PKR /sq. ft. approx.
Biggest Losers during last 12 months
- Bahria Town - 10 Marla (-2.16)
- Bahria Town overall - 10 Marla (-0.60)
Biggest Winners during last 12 months
- MPCHS - 10 Marla (+35.78)
- B-17 - 10 Marla (+35.34)
- B-17 - Overall (33.6%)
Other notable appreciations in Gulberg 1 Kanal, D-12, 1 Kanal, G-13 10 Marla
3. Residential Units (Apartments etc.) - General and Overall Trend is also positive. As a matter of facts, apartments at pre-launch are sold approximately around 5000 - 5500/sq. ft. and near to completion they are around 7000 - 8000 /sq.ft. approx. That is at prime locations like BTs early phases, Gulberg Greens and DHA - average projects and discounting apartments from the likes of Centaurus.
From foundation work of apartments to hand over prices can be appreciated anywhere between 2000 - 3000/sq. ft. approx. After hand over/possession there can be slow and steady growth over-time. The trick to invest in apartments is when the very first floor structure is under construction (approx. 5000 - 5500/sq. ft.) and a suitable time to sell it when possession has been obtained (approx. 7000 - 8000/sq. ft.) - requires a time period of 2 - 4 years. For example, a 500 sq. ft. apartment bought at installments for a price of 2.5 million in 2 - 4 years can expectedly reach at 3.5 million.
What lies in the future?
No one knows but the trend, as of now is upwards (appreciation), especially based on last 12 months constructed houses are gaining back what was lost. Overall with PKR depreciation, increasing demands for housing and National Priority (as per new govt.) will most likely increase the prices. Based on statistical data of the overall city, following are minimalist numbers based on speculative trends of growth.
- On 'average' (as things stand now) expect a growth of 4.5 to 5.0 PKR (+4.5% to +5.0% - conservative and minimum figures) on each 100 PKR invested in a house in ISB (Rent can be a bonus that can be from 0.4% - 0.5%/month of total investment).
*Expected Gain over 12 months time =
Total Appreciation + Rental Yield = (4.5% to 5.0%) + (4.8% to 6.0%) = 9.3% to 11% (net total)
- On 'average' (as things stand now) expect a growth of 8.0 - to 8.5 (+8.0% to +8.5% - conservative and minimum figures) PKR on each 100 PKR invested in a plot in ISB.
We must filter out the artificial hikes caused by dealership to boost sales or reflect a false sense of increased transactions. Like Society Launching a plot at 2.0 million and after 3 months without much development taking it to 3.0 million and allowing its dealers to ask for a premium of 0.5 million on old files/plots. That is all artificial and doesn't reflect the genuine market and is bound to crash at some point!
*PKR depreciation seems obvious in the near future so that may add up to the cost, if one is planing to construct but on the other hand that may further boost already constructed houses.
Thank you Imtiaz sb for a very detailed analysis. I really appreciate it!
Imtiaz Sb.
A very well versed and well thought analysis indeed.
I just quoted some examples of my friends who have been shifted from I & G-series sectors of CDA to DHAs & BTs and put their CDA houses on rent.
F-11 price came down, is an experience of my close friend but Imtiaz sb. research is an umbrella covering all aspects of the CDA property.
CDA’s stable prices are on demand & supply and CDA supply is hardily getting going!
One thing however is most likely: DHAs/BTs will become on par with I & G-series CDAs in near future on ROI, if CDA keeps gathering corrupt flock.
Thanks Imtiaz and AQ, the greats.Very nice analysis.
In near future, CDA will offer more plot for sale,as government need money and plots selling is what they know (Allem etc). So my opinion, keep your cash ready to chip in any new plots announcement.
Construction prices will go up, as PTI government promised of new houses, and so cement, etc.
DHA will increase its prices and Bahria will be hit by Supreme court (before the current CJP retires, Jan 2019).
Yes, I think so too.
So if CDA offers more investment options, which most probably it will, then prices may further come down? The announcement that CDA has been instructed to take up Margalla Avenue project will increase prices in D 12 and B 17 plus adjoining sectors which will benefit from Margalla ave. C 14 and 15 will come into focus.
Regards
B-17 prices are already very high . Margalla Avenue will help to stabilize the prices of B-17.
So when is work on Margalla Ave going to start?
Things dont look bright, at-least in the nearer future, unless there is a very recent update.
https://www.pakistantoday.com.pk/2018/08/25/expansion-project-of-margalla-avenue-in-limbo-no-hope-of-revival/
Yeh I dont know of any recent news about it either.
A very recent update:
CDA to Resume Construction of Margalla Avenue Project - Oct, 2018
"In a meeting held in the first week of October 2018, CDA Chairman Mr. Afzal Latif has directed the member estate management to resolve the land issues within 60 days so that the construction on Margalla Avenue can be resumed. CDA Sectors C-14, C-15 and C-16 cannot be developed until Margalla Highway is constructed that is the main access road for these sectors. CDA can earn billions of rupees from the planned sectors only after the access road is completed, moreover property prices in distant sectors of zone 2 like D-17 and B-17 will also escalate due to this major development."
https://i2.wp.com/manahilestate.com/wp-content/uploads/2018/10/Margalla-avenue-News.jpg
https://i2.wp.com/manahilestate.com/wp-content/uploads/2018/10/Margalla-Avenue-Islamabad-1.jpg
Source: http://manahilestate.com/cda-to-resume-construction-of-margalla-avenue-project/
Thank you Imtiaz, appreciate your helpful comments.