OVERVIEW
Gwadar seems to have been a key ingredient in the trends experienced by most cities during Q1 2017. While the city did not seem like much of an investor favourite when the year began, it did make its presence felt during February by attracting investors away from Karachi. During March, similar trends were seen once again in Karachi, along with Lahore and Islamabad.
In Lahore’s realty sector Bahria Orchard stood out by showing impressive growth during the first quarter of the year. Other areas that typically attract investor attention either exhibited moderate growth or remained stable, including DHA Lahore and LDA Avenue I, signifying a shift in investor interest.
The capital city has been seeing real estate activity courtesy genuine buyers that are active in the market. Investment levels never really returned to normal compared to the pretax scenario, and projects that did seem like investor favourites, i.e. DHA Islamabad, are now seeing dips in prices, potentially because of Gwadar. Sector B-17 experienced sharp price rises because of its ongoing development work.
Similarly, Gulberg Residencia also experienced sharp rises during Q1. The first three months have been good to Bahria Town Islamabad/Rawalpindi, which has managed to stay ahead of the game by shooting up on the price list with a 9.57% hike in the prices of 1-kanal plots, and another 11.29% rise in the prices of 10-marla plots. Its speedy development has been a key reason that it has continued to perform well, and a similarly rapid pace of development has also helped projects such as Bahria Town Karachi (BTK) stand out in Karachi.
The city by the sea started out the first quarter by showing good growth in prices overall. However, the latter two-thirds of the first quarter had Gwadar snapping up investors left, right and centre. Both DHA Karachi and DHA City Karachi (DCK) felt the impact.
Meanwhile, BTK managed to propel itself onto new heights during Q1. The locality saw prices literally shoot up 17.24% and 24.08% for 500-yard2 and 250-yard2 plots. The fast pace of development is constantly causing price surges, and it doesn’t seem like the project will be slowing down anytime soon.
In Gujranwala, the market saw DHA Gujranwala rise as a heavy contender that captured investor interest right off the bat. While it’s stable at the moment, in its short history the project has seen several sharp rises in prices. It experienced massive hikes in February, and moderate growth in January.
On the flip side, DC Colony sunk a little further down on the price charts with 12.81% and 17.40% drops in the prices of 1-kanal and 10-marla plots, respectively.
LAHORE
Investors in Lahore were cautiously re-entering the market post last year’s tax implementation. However, Q1 2017 ended on an interesting note for Lahore, with many investors looking towards Gwadar for better returns.
DHA Lahore Phases I to VI saw moderate growth in the first quarter. The saturation levels here have a large part to play. Investors had been active in Phases VII to IX, but many shifted focus to Gwadar towards the end of Q1. The entirety of DHA Lahore experienced moderate growth. It is important to note that prices in Phase VIII dropped because its original rise has been unnatural.
Wapda Town stayed stable for 1-kanal plots with 0.67% growth, and registered a 1.83% rise in prices of 10-marla plots.
Bahria Town experienced moderate growth overall, while Bahria Orchard stood out with its sharp price hikes of 6.20% and 6.39% for 1-kanal and 10-marla plots, respectively. Property in Orchard is relatively cheaper as compared to Bahria Town itself which is why more buyers have been active here.
LDA Avenue I enjoyed moderate growth overall in Q1 with prices for 1-kanal plots inching up by 2.69% and prices for 10-marla plots moving upwards by 2.84%. The market has been slow, which means not many investors are active in this locality.
ISLAMABAD
Islamabad’s real estate market has been chugging along with the help of genuine buyers ever since last year’s taxes hit. In addition, some hotbeds for investment are now being somewhat sidelined because of Gwadar’s rising popularity. DHA Islamabad saw moderate drops in property prices during Q1 2017; 10-marla plots falling 3.40%, while prices for 1-kanal plots remained stable with a 0.36% rise. Investors that were taking some interest here have now found new property options to play within Gwadar.
Bahria Town consistently performed well with sharp rises of 9.57% for 1-kanal plots, and 11.29% for 1 0-marla plots during the first quarter of 20 17.
Development continued at a good pace in m any blocks. In March alone, Sector N performed well, while Sector J presented itself as a good spot for investors looking for big returns. Commercial activity in the latter will cause property prices to further shoot up in the coming months. Bahria’s growth can also be attributed to the development that has been taking place in Bahria Enclave.
Sector B-17 registered sharp hikes of 6.33 % and 5.25% for 1-kanal and 10-marla plots, respectively. Development work that has been ongoing during the first quarter is largely the reason for the locality ’s positive growth trends.
Although Gulberg Residencia reported sharp rises in property prices, it should be noted that these are in comparison to the closing rates in December 2 016. In reality, the society more or less remained stable throughout Q1.
Sector E-11 remained stable through Q1 for 1-kana l plots, while prices for 10-marla plots saw moderate dips. Similarly, F-1 1 remained stable for 1-kanal plots, and experienced moderate drops of 3.40% for 10-marla plots.
KARACHI
Pakistan’s business hub started the year on a good note with sharp rises in big projects such as DCK and BTK. Property values even inched up for otherwise stagnating localities such as Gulshan-e-Iqbal. However, this growth cooled for some areas down during the last two months of Q1 2017.
DHA Karachi’s saturation levels, combined with the allure of Gwadar’s big returns, led to a dip in its numbers during February and March. Prices for 500-yard2 and 250-yard2 plots managed to stay stable with mild 1.00% and 0.20% drops respectively, during the first quarter.
DCK similarly registered drops in both February and March, following the sharp rise in its prices during January. Gwadar pulled investors away leaving it with an overall moderate growth of 1.38% for 500-yard2 plots, and sharp rise of 7.00% for
250-yard2 plots in Q1 2017. The positive numbers can be attributed to its growth in January, coupled with much a smaller closing average price tag in December 2016.
BTK seems to have consistently ignored any dips and falls other parts of the city’s realty sector experienced. It posted a sharp rise of 17.24% for 500-yard2 plots, and another 24.08% for 250-yard2 plots during this period. The project has grown consistently throughout Q1. Investors are taking an added interest because of the speed at which BTK plots are changing hands. The fast pace of development in the society has made it impossible for investors to divert attention, it seems. Gulshan-e-Iqbal has managed to cling judiciously to its stability throughout February and March. Its Q1 moderate growth is in part the result of the price hikes it experienced in January.
GUJRANWALA
Gujranwala’s realty market had an interesting first quarter. Some societies remained consistent in their stability and some in their decline.
DHA Gujranwala was the most unpredictable and had its own trends to report every month. While it saw moderate growth in January, prices shot up during February because of buzz around other DHA projects in the country. On the other hand, March saw prices cool into stability. The society saw an impressive overall sharp rise of 10.38% for 1-kanal plots and 10.39% for 10-marla plots during 2017’s first quarter.
Citi Housing experienced drops of 1.24% and 1.55% for 1-kanal and 10-marla plots respectively. Master City stayed stable with a 0.65% rise for 10-marla plots, and experienced moderate growth of 1.21% for 1-kanal plot prices.
DC Colony did not do too well during the first three months of 2017. The society registered sharp drops for both 1-kanal and 10-marla plots at 12.81% and 17.40%, respectively. Last month we reported that prices were falling because it comes under the Cantt Board which has more or less made transfers impossible, a situation that is yet to change. Sale-purchase activity continued to drop, and may do so in the coming months as well.
FINAL ANALYSIS
This year’s first quarter has seen the property market come back to somewhat of its original shape. Many areas have seen promising price hikes, and these trends are expected to continue as large infrastructure projects in many cities make their way towards completion. Notable amongst these would be the new developments on Lahore Ring Road and Islamabad’s new airport.
It was also interesting to note the impact that Gwadar had on the market towards the end of February, and during most of March. The three major cities featured in this Market Report, i.e. Lahore, Karachi and Islamabad, have all lost some of their investors to Gwadar. The city’s rise has not been accidental, and as development grows it may continue.
“Investors who had taken a back seat after the implementation of the new tax regime last year seem to have found motivation to return, so in effect I would say that Gwadar’s rise is a good thing. Our search trends for the city have seen spikes of 235.72% for plots, 291.42% for houses, and 243.61% for commercial property in the last year,” said Zameen.com CEO Zeeshan Ali Khan
“However, I don’t think it’s all gloom and doom for other cities either. For example, BTK has taken the investors by storm – and anyone who is worried that the market is drying up in these cities should not be,” he added.
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Thanks for this article!
Gujranwala: Citi housing and master city doing great job in terms of on ground development and getting real response from the investors as well as the end users.
Gwadar: Inshallah will grow more as its speeding up every single day. God Bless Pakistan