Karachi boasts strong performance, Lahore and Islamabad witness upward movement
According to Pakistan property portal Zameen.com, when compared to a rather uneventful 2014, 2015 generally proved to be an exceptional year for Pakistan's real estate sector. The constant activity, coupled with an overall positive outlook displayed by buyers and sellers alike, promoted a vigorous investment environment across all major cities.
According to statistics compiled by Zameen.com, Karachi flaunted spectacular numbers and registered remarkable price rises. However, Bahria Town Karachi (BTK) was an exception to this, as rates fell noticeably in this particular society.
2015 was better for Lahore's realty market as well, but Defence Housing Authority (DHA) Lahore failed to impress investors and just managed to hang on to mere stability. Nevertheless, this should not be a reason for major apprehension.
In Islamabad, growth was noticed in almost all major areas. And yet, Bahria Town was an exception here, too, as the locality did not perform that well.
Once again, DHA and Bahria Town retained their popularity among investors and homebuyers, as predicted. However, the list of top 5 localities for homes saw a surprising new entrant - Bani Gala, which took over the spot that Sector F-11 enjoyed in 2014.
As mentioned in the Overview, DHA Lahore could not overly excite investors, as it remained merely stable in 2015. The average price of 1-kanal plots stood at PKR 14,881,211, a meagre 0.29% decrease from last year. Yet, investors need not worry as DHA does has a record of delivering to its stakeholders. Therefore, even mere stability is good news as it indicates safe investment.
Even in the face of various controversies, prices for 1-kanal plots in Bahria Town increased by an impressive 13.91%, bringing the average up to a solid PKR 11,291,147. Despite the possibility of Lahore Ring Road (LRR)'s southern route cutting through the locality still being a widely discussed topic, it seems that investors are still optimistic that their patience will bear fruit.
LDA Avenue I, a locality that enjoys a better address than many other societies in southern Lahore, could not post extraordinary numbers either. However, it did witness moderate growth. This is probably because the locality is plagued by various litigation problems and electricity supply issues. The prices of 1-kanal plots did shoot up by 9.06%, pushing the average price up to PKR 9,632,064.
Wapda Town exhibited a 7.25% in the rates of 1-kanal plots. The average price for these plots was PKR 15,564,745, indicating that 2015 was a good, but not phenomenal, year for this society.
The federal capital's Sector F-11 posted noteworthy numbers in 2015, as rates of 1-kanal plots hiked by a healthy 15.99%. This was quite an improvement from 2014 which brought the average price of these plots to an impressive PKR 52,346,961.
While DHA Islamabad posted a moderate growth of 9.39%, pushing the average price of 1-kanal plots to PKR PKR 12,515,396, Bahria Town remained stagnant. The locality just managed to post a 2.63% rise and the average price of plots remained almost the same - PKR 11,868,293. Many believe that it was probably Bahria Enclave II's downfall that terminated any major spikes. However, according to Zameen.com's popularity index, the locality remained popular among genuine investors and homebuyers, but certainly not as popular as DHA.
Sector E-11, a locality that saw moderate growth in 2014, remained pretty much on the same track in 2015. It registered a 5.52% increase, bringing the average price of 1-kanal plots up to PKR 37,717,494.
Karachi's property market performed brilliantly and saw meteoric growth in 2015.
While most localities in the city of lights flaunted impressive numbers, just BTK marched in the other direction by registering a 9.74% plunge for the 500-yard2 plot category. At the end of the year, the average price stood at PKR 5,789,565. It is possible that investors did not show overwhelming interest in this locality because they are waiting for the expected launch of Bahria Town Peshawar. However, genuine buyers maintained their interest.
Both DHA Karachi and Gulshan-e-Iqbal performed remarkably well. Compared to 2014, these societies saw noteworthy growth and managed to increase investor interest. DHA posted a 15.87% rise, bringing the average rate of 500 yard2 plots up to PKR 37,011,238, while Gulshan-e-Iqbal registered a whopping 19.56% rise, pushing the average up to PKR 24,572,062.
Despite all this, it was DHA City Karachi (DCK) that truly stole the limelight. The average price of 500-yard2 plots came up to PKR 4,383,367, which is an incredible 66.71% increase from last year. In terms of price rise, it is approximately a PKR 2,000,000 increase.
Pakistan Property Market Predictions
Needless to say, 2015 was clearly a better year than 2014 and the growth witnessed in Karachi's property sector was the definite highlight. In 2016, DHA Karachi, DCK and Gulshan-e-Iqbal will probably continue their roaring upward ascent, but BTK's status remains rather vague. Even though development work is underway at a decent pace, the decline in rates in a bit concerning.
Lahore and Islamabad also performed well, as no jarring plunges were noticed.
In the case of Lahore, we have a feeling that 2016 will shape up to be a much better year. As we said earlier, DHA Lahore's stability should not be a cause for concern, as the commencement of development work in Phase IX and the completion of Phase VII and VIII will certainly pull more investors. Despite facing multiple controversies, Bahria Town Lahore remained a healthy performer in 2015, but the resolution of LRR-related issues is needed to clarify its status further. In the same way, if electricity and litigation issues are resolved in LDA Avenue 1, prices will probably rise in this locality.
Bahria Town in Islamabad, too, needs to resolve its existing issues if the developer wants investors to channel money into the society. If it doesn't, investors will flock towards the other investment options in Islamabad, which will continue to be lucrative in 2016.
"As I predicted in Zameen.com's Annual Market Report 2014, this year has been a much better one in terms of market activity. Karachi's stellar performance, propelled by the improved law and order in the city, truly has us at the edge of our seats!" said Zameen.com CEO Zeeshan Ali Khan.
"However, the imposition of withholding tax on bank transactions during the second half of 2015 did disrupt the market to a certain extent. In this regard, the government needs to facilitate the property sector to boost its popularity. Despite this, we, at Zameen.com, are really excited about 2016. It's certainly a good time to be in this business," he added.