DHA Lahore Bahria Town Map Plots Houses Buy Sell Rent Property Prices

It has been for quite some times that Lahore Property market had been dull. However at the same time one can see a lot of construction activities in Lahore. The mushrooming Plazas on the main city roadS and in DHA and a number of housing projects by Eden City, Lake City and Bahria Town. One can also see development activities all over except Paragon and State Life.
Many property dealers are without work! Yes they are as the percentage growth of Property Dealing business was much higher in the artificial boom period of 2005. In my opinion the speculative market of March 2005 was artificial and so was the growth in property dealing business. The number has reduced considerably and is likely to reduce further. The argument that property dealers are sitting idle being a major indicator of lull in the property business is not a true indicator of real estate market. In the good old days there one could count the real estate offices in Lahore.
Discussions are going on about the future of property and upward trends in the prices in different forums. Probably we all are looking forward to the boom of 2005, having little concern that the boom was artificial and was not based on any economic reality. I feel that it will never be back again as the people are much wiser and we all have learnt from the experience of 2005.
Investors will not be able to manipulate the prices and developers like Bahria will not be able to sell their forms in the black market (Like Phase 9 Bahria Rawalpindi). The prices will remain stable and will only increase marginally in relation to the exchange rate of PKR and inflation in the country. Buyers are much wiser and will only invest in visible plots instead of files. Home builders who look for easy installments, will only buy files from reputed developers directly or pick up files from sellers at a small percentage of profit. In this category normally young people in their early 40’s fall. There are a large percentage of elderly people who can easily pay installments and want to invest in property for themselves or for their future generation or even to avoid interest on their savings. Files in the market became very popular due to this phenomenon which is very peculiar to Pakistan in general and Lahore in particular. If it was not due to the investors who pushed the prices of files to record level in 2005; this trend would have continued. Percentage of woman opting for this option is greater than men.
Developed ready to build plots will be the buyer’s choice. However in the absence of bank financing and very expensive bank loans, only small percentage of people can buy a plot and build a house. We therefore see a decline in the buyer’s activity. For those who can afford 6 to 8 Million for a kanal plot, the trend setters will be prices in DHA Lahore 5 where density of constructed houses is fairly good, DHA 6 where ratio of constructed houses is smaller. Park View will be another trend setter due to its location and density of construction.
Those who can spend 4 to 5 Million on a Ready to Build Plot will go out to suburbs which are being built at a very high pace. The Road network especially lateral road network between Ferozpur road, Raiwind Road and Multan road is fast developing and people with lower budget can buy a plot and built a house or opt for buying a house from the builders. One can buy a house in the price of 1Kanal plot in DHA Phase5.
Expatriates have remitted more than 7 Billions US $. This is equal to PKR 5700 Crore. The socio-economic trends of beneficiary in Pakistan we understand that they are hard working, middle class people with good religious belief. They are home builders, avoid Riba(Interest). They lead simple lives and can easily save 60% of the money spend by a son from abroad. They will usually buy land, shop and build a house after meeting essential expenses on education, weddings and health. In my opinion PKR 30,00 Crore will still find its way to the real estate. Out of this amount Lahore will get at least 1500 to 2000 Crore. It can therefore be logically concluded that Lahore has a market share of 2000 CRORE no matter what way we look at it.
There is a huge shortage of housing in major urban centers like Lahore and people are looking forward for better living standard. Unlike the advanced industrialized countries, housing is not financed liberally by banks and it had been traditionally a self financed venture. It can be safely assumed that the demand for housing is there and the people have 20 to 50K Crore to spend in this sector in Lahore alone.
It is probably the Supply/demand phenomenon that the prices are not raising. In 2005 a number of developers launched an unprecedented number of housing schemes. Bahria Town, Urban Developers, Lake City Holding, DHA, Eden City and many others over loaded the supply. This maybe one of the reasons that the prices of residential property remained depressed.
Real Estate also attracted investment from those who wanted to make quick money. This is the primary cause that the market saw a unexplainable surge from August 2004 to March 2005. Investors were sharp enough to sell their holdings and many simple people who had bought at higher price during the surge period suffered huge losses.
Global economic depression also played a role. US economy witnessed recession. Job losses in the US also had some effect on Pakistani Expatriates in North America. However, remittance in this period increased and one can safely conclude that Global economic down turn had little effect on the Lahore real Estate market. It may be psychological only.
Many investors shifted their money to Dubai and Ajman and suffered huge losses. They are shying away from re-investment in the real estate.
The war on terror and inability of the Government to manage economy, load shedding and shortage of water is taking heavy toll but then people have to live no matter what conditions prevail. They have nowhere to go. Unlike the Afghani they cannot migrate to the country on its Eastern borders (India). The life has to go on and people requirement of shelter will always be there.
The market will be strictly governed by Supply/demand; no surge is expected like in 2005. The demand for housing especially those offered by Developers and Builders will be there. Some gradual upward trend in residential plots is also expected. It can be safely assumed that the worst is behind us and now onwards we will see decent activity in the market.

Posted By : Greenkonnection