How real is the current demand for DHA Gujranwala files?

It is generally believed among real estate investors that dealing in property files could be a way to avoid the new taxes imposed by the government in the Budget 2016-17. This could be true as a number of new taxes in an increased ratio are now applicable on transferable property, which would certainly not apply on the purchase of an affidavit file.

Could this be the reason that the rate of plot files has gone up in DHA Gujranwala? It is doubtful, but the fact remains that many investors who are currently busy assessing the implications of the recent tax amendments are considering purchasing these files. For these folks, this article intends to discuss different aspects of the recent price hike seen in DHA Gujranwala plot files and also debate whether investing in this project could be a safe bet at the moment.

Price trends seen so far in 2016

In the beginning of the year, the 10-marla and 1-kanal affidavit file rate in DHA Gujranwala was PKR 1,800,000 and PKR 2,800,000 respectively with marginal ups and downs seen in the preceding month. There was hardly a price rise noticed between January and April 2016, but then came Ramadan, a month generally considered slow for the real estate market, and pushed these rates to PKR 2,400,000 and PKR 3,500,000 for 10-marla and 1-kanal plot files.

At the moment, purchasing a 10-marla file in DHA Gujranwala is a deal of PKR 2,500,000. Those looking to purchase a 1-kanal plot file would have to pay PKR 3,600,000. Please note that rates quoted in this article are for the affidavit files as allocation files are not being traded at the moment because of the temporary halt seen in the file transfer procedure from DHA’s end. Moreover, investors are also drawn to buying these files as the transfer fee for 10-marla and 1-kanal allocation file is PKR 154,000 and PKR 245,000 in that order.

Does the price hike rest on solid ground?

If you only look at the increased rate and consider it in terms of percentage rise, it might appear that something big is expected to happen in DHA Gujranwala in terms of development. Many agents might also lure you into purchasing these files at higher rates, suggesting that the files currently available will soon be gone to the secondary buyer, leaving you with no option but to pick the allocation file that comes with an added cost in the form of transfer fee. There is, however, another side to the story!

At the moment, DHA has allowed only a couple of Memorandum of Understanding (MoU) holders to deal in DHA Gujranwala files. This has led to a temporary shortage of files, creating an artificial demand in the market. Moreover, transfer of allocation files has also been closed down for reasons not shared by the DHA office. All of this has combined to create a major hype for these files, thus excess demand and limited supply have inflated the rates.

What should be done?

Purchasing DHA Gujranwala files is certainly not something I would recommend as the rates are likely to drop soon. Even if the rates don’t revert to the old prices, the difference will still be significant. It is expected that DHA will allow more dealers to trade affidavit and allocation files in a couple of weeks, which will in turn increase the number of files available in the market and fix the existing shortage. There will certainly be a correction. So if you are looking to purchase DHA Gujranwala files, you should wait for another two weeks and meanwhile keep an eye on the rates.

For file owners, who are tired of seeing the project at a standstill and can’t wait for an indefinite period of time to see the project’s launch and related development, selling the files at the current rates could a blessing in disguise.

What’s expected of DHA Gujranwala in the near future?

The issues that have kept the project from seeing an official launch still exist and the authority concerned doesn’t seem very interested in attending to them. From where I see it, once the rates settle down, DHA Gujranwala will once again become a passive project within the growing city that has seen many private societies grow and reward investors with concrete developments resting on the back of developers’ solid commitments.

If you wish to share your thoughts on this article, please leave your comments below.