What’s happening in Phase 8 of Bahria Town, Islamabad?

We all know about Bahria Town, a posh residential community that has set new benchmarks in terms of real estate development in Pakistan. After proving its mettle in Lahore, the developer entered the property market of Islamabad. Among multiple projects in the Federal Capital and its surroundings, Bahria Town Phase 8 is probably the most successful one and provides all the necessary facilities. However, recent trends have shown that real estate activity has dwindled in the area, leaving many to wonder why that is the case.

As the property price data maintained by Zameen.com reflects, the average sale price of 5-marla plots in Bahria Town Phase 8 was Rs 3,190,204 in January 2015, which dropped to Rs 2,395,223 in August 2015. The same trend was seen for 10-marla plots that had an average sale price of Rs 4,463,594 in January 2015, but the price dropped to Rs 3,915,219 within a period of eight months. Similar trends were witnessed for 1-kanal plots, although the variation was minimal for this category.

These descending rate trends in a successful residential community might have caused slight confusion among investors. For this reason, I turned to Mr Imran Rasheed of Al-Madina Real Estate Management Company for some answers.

According to Mr Rasheed, while Bahria Town Phase 8 has offered immense investment potential, investors are now looking to inject their money elsewhere. He claimed that investors are currently opting for projects such as Bahria Town Nawabshah, which has launched recently, and Bahria Town Peshawar, which is due to launch very soon. This is because redirecting resources towards new projects often generates fast, short-term gains. The value of a plot might be higher in Phase 8, but sellers are willing to let them go at a lower rate for fast cash to invest in other high-potential areas, Mr Rasheed said.

Providing rough estimates, he maintained that approximately 40% of Phase 8 was still underdeveloped, adding that completion of these areas was a priority for the developer. Commenting on the future of Phase 8, Mr Rasheed said property rates in the developed areas are likely to improve in the near future but, if construction work is not completed in underdeveloped areas, investors should not expect a major surge in prices.

It is also probable that many investors who want to make a purchase in Phase 8 are waiting for things to get a bit clearer after Eid-ul-Azha. Real estate activity usually picks up after Eid because overseas Pakistanis, in town for the holidays, often invest in the property sector.

I personally believe that despite competition, Phase 8 will attract further investment in the future. Hence, those skeptical regarding investment in the community should set aside their fears, as the sun always shines after a little rain.

Let me know your thoughts in the comments section below.