Islamabad gets the best of Pakistan real estate – Zameen’s analysis of Q3, 2013

With an average increase of 68% in the year so far, residential plots in the Federal Capital of Pakistan have surprised many. In Bahria Town (Rawalpindi) alone, the property rate has almost doubled since January this year. When compared with performance of property in known localities of Lahore and Karachi, Islamabad real estate sector enjoys its lion’s share from the brewing property market of Pakistan. Zameen.com offers a detailed analysis of the performance of major residential projects in Lahore, Karachi and Islamabad during the third quarter of 2013.

In the last many years, it was observed that the sale and purchase activity in Pakistan real estate sector slowed down, to almost dead levels, towards the end of the year. The buyers and investors too were seen sceptic about making a property purchase in later quarters. It however seems that things have bit changed about the country’s property market where the recent concept is that the sooner you invest in the property sector, the greater are the chances to increase your profit margins. Despite trying to link this belief with the deteriorating value of money and rising inflation, Zameen.com’s this report primarily focuses on the performance of residential plots, during the 3^rd quarter of 2013, in the top 3 communities of Karachi, Islamabad and Lahore.

With average price hike of 41.70%, Lahore continues to be in the limelight

In Lahore, DHA is so far the most prominent residential locality as well as property & plot investment. Following it closely behind is Bahria Town Lahore, which has lately become a much comparable locality with DHA in terms of lifestyle standards and of course the property demand and value. As per the latest stats recorded by Zameen.com, value of 1 kanal residential plot in DHA Lahore is about 35% more expensive than that of a similar plot in Bahria Town. This difference in the property rate of DHA and Bahria Town was almost

48% during the beginning of this year.Zameen.com’s stats for residential plots in DHA Lahore reveal that the property value here experienced a jump of 15.44% during Q3, which is the highest spike of the year so far. As of Sep 2013, 1 kanal plots in DHA Lahore, on the average, cost about Rs. 14.17 million. The value of the same plot in January this year was Rs. 10.38 million. During the first 3 quarters of 2013, rates of residential plots in DHA Lahore have increased 36.40%. The prevailing buying and selling trends in DHA Lahore suggest that market will remain up during the 4^th quarter of the year and even the slow activity is unlikely to bring the DHA property rates down.

When it comes to crowning the top locality of Lahore in terms of growth in property rates during the first three quarters of the year, Bahria Town is the deserving candidate. The locality is leading the charts with quite an impressive margin. During the year so far, the value of residential plots in Bahria Town has doubled.  With an annual price hike of 49.13%, Bahria Town is surely the investment hub of Lahore these days where every deal made consciously promises higher gains over shorter period of time. In Q3 2013, the property rates in Bahria Town increased about 5%. Although the price hike for the third quarter is far less than that recorded in Q2, yet the continuous rise in property rates is a positive sign.

The third most talked about elite housing society of Lahore has been Cantt. In fact, the locality tops the preference charts for many people when it comes to community management, security, cleanliness and peacefulness. Zameen.com’s data shows that the property value in the Cantt is on upward trek since the beginning of this year and for 1-Kanal residential plots here, the 3^rd quarter brought along a price hike of 12.80%. With an annual increase of 36.60%, property in Cantt Lahore is as strong and valuable as it ever was. As per the stats of Sep 2013, value of 1 Kanal residential plot in Cantt has reached Rs. 31.60 million.

Capital’s property sector scores the highest price hike for first 3 quarters of 2013

For Islamabad real estate sector, the overall performance has been very encouraging. The year 2013 so far is perhaps the best year for the capital as the rate of development work and that of property in the city has augmented to a huge extent. When studied overall, the price hike for residential plots in the capital is the highest in Pakistan. During the first three quarters of year, the overall increase in rates of residential plots in Karachi remained 25.70%, for Lahore this percentages is 41.70% and for Islamabad, the average price hike for residential plots has been a staggering 67.70%. These figures say a lot about the prevailing property buying and selling trends seen

in the 3 major cities of Pakistan.As per the data maintained by Zameen.com, value of residential plots in Bahria Town Rawalpindi has increased 98.63% since January this year. Such an impressive spike in property rates makes this locality the investment heaven of the capital. In Q3, the value of 1-Kanal residential plots in Bahria Town Islamabad increased 11%, which is almost one-third of the price hike notice in the first 2 quarters of the year. Considering the overall drop in the buying and selling activity in the property market, an 11% rise is a decent one. In view of the locality’s performance in the past, rates in Bahria Town need a slight drop to register further hikes and perhaps the 4^th quarter will do the same for residential plots in this locality.

In Sector G-11, Islamabad, residential plots appear much in demand as the property rates here have been rising throughout the year. In Q3, rates of 1-Kanal plots in G-11 increased 6.55% and closed at Rs. 43 million. For F-11, however, there was a slight drop in the property price of 1 Kanal plots during the 3^rd quarter i.e. 1.41% but the annual hike seen in the rates of residential plots here subsides this marginal drop.

Plots in Karachi now value 25.79% more

For Karachi real estate sector, Zameen.com studied the performance of 1-Kanal residential plots in DHA, Gulshan-e-Iqbal and Gulistan-e-Johar. According to the portal’s finding, Q3 brought along a decent price hike for residential plots in Gulistan-e-Johar. In fact, Q3 is so far the best quarter of the year for this locality. As compared with the property rates recorded in Q2, value of residential plots here has increased 6.40%. As of September 2013, a 1-Kanal plot in Gulistan-e-Johar costs about Rs. 8.87 million. The value of the same plot in Q2 was Rs. 8.33 million. During 2013 so far, the overall price hike for these plots in Gulistan-e-Johar has been 8.33%.

The situation for Gulshan-e-Iqbal has been somewhat opposite of that of Gulistan-e-Johar as Q3 witness a drop in 1 kanal residential plots located here. During the first two quarters of 2013, the overall rise in Gulshan-e-Iqbal’s property rate was 27.12% but as soon as the Q3 started, property rates here dropped by 2.04%. It seems that either the investors in Karachi are responding to the year-end’s slow activity or they have better investment options. When compared with the property rates recorded for Q2, the collective price drop for residential plots in Gulistan-e-Johar in Q3 remain 1.35%. According to Zameen.com’s data for Sep 2013, the asking price of of 1 kanal plot in Gulshan-e-Iqbal is Rs. 14.8 million.

Q3 brought along some very handsome figures for DHA Karachi as the rate of 1-Kanal plots here increased almost 26% during these three months. For Defence Karachi, Q3 has been the best quarter of the year so far because the combined price rise for residential plots in first two quarter of the year is almost the half of that recorded in Q3. The results of Q3 2013 have showed once again that Defence is the most popular and trusted locality of Karachi for property investment.

Pakistan real estate sector is out of its blues and prepared for getting the best from the present property boom. The results of Q3 pretty much show that the investors are not letting their guards down on the year-end’s slow activity nor do they allow the rumours to spoil the deal for them.