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Real Estate Prices out of common man’s reach

LAHORE – In view of the soaring prices of real estate in the provincial capital, common man can only dream of building his own house. The rates of property in entire Lahore, including the old city as well as the modern localities, have touched the figure of almost 10 million just for a small home of few marlas.

On the other hand, the government is focusing on yellow cab schemes, which is not the need of every person. But home is the fundamental right and requirement of every citizen that is not being prioritised by the authorities.

Although a couple of government housing schemes have been announced where houses will be allotted through balloting to a limited number of homeless people, it is not a solution for all. Real estate industry experts say the endeavours for developing housing sector at the government level will not only provide homes to the people of low income group but also gear up economic activities in almost 50 related industries. Presently, there is a shortfall of over 2 million houses in the provincial metropolis, they say and stress the need for developing affordable housing projects at government level.

They add that the property market in posh areas, which registered a considerable rise in prices throughout 2013, has been showing a lukewarm response in current year with little buying and selling activity. The rates in these localities also remained stable as banks are reluctant to enter housing finance business despite the fact that the real estate and the construction industry in Pakistan is worth around Rs500 billion.
“Though the real estate is an important sector for country’s economy, employing over 5 per cent of the labour force directly in construction and much more in related industries, yet a key hindrance to the development of the sector is the availability of housing finance,” the experts shared their views.
According to the former chairman of Association of Builders and Developers of Pakistan, Akbar Sheikh, presently the total value of home loans in Pakistan banking sector is just 1.5pc (Rs50b) of all outstanding loans in the country.

As per real estate market sources, DHA has been the most sought after residential area. The average price of a 1-kanal plot increased to Rs14.5m from Rs11.8m in 2013, which is now hovering at around Rs13.5m figure. Impressive price increases were seen for plots in Bahria Town Lahore, where scarcity of land pushed prices up. Price graphs for these areas show a considerable jump in 2013, which may continue in 2014 as well.

The rates of Bahria Town Lahore Sector A-F 10 Marla plots are standing in the range of Rs4m to Rs6m, 1 Kanal Rs8.5m to Rs30m; Bahria Orchard Lahore Plots of 5 Marla range between Rs1.4m to Rs1.8m, 10 Marla for Rs3m to Rs3.8m; 5 Marla plots in Bahria Nasheman Lahore vary between Rs2.2m to Rs2.6m, 8 Marla Rs3.2m to 3.4m; AWT Phase 2 Lahore 10 Marla plots are available for Rs2m to Rs2.9m, 1 Kanal for Rs3.2m to Rs6m.
10 Marla plots in Central Park Lahore are being sold for Rs2.2m to Rs2.8m, 1 Kanal for Rs3.2m to Rs4.2; 10 Marla plots in Eden City Lahore are being offered at Rs6.5m to Rs8m, 1 Kanal at Rs9m to Rs12.5m; 10 Marla plots in Fazaia Lahore are being sold at Rs3m to Rs3.8m, 1 Kanal for Rs4.5m to Rs6.5m; NFC Phase 2 Lahore plots of 5 Marla for Rs1m to Rs1.5m, 10 Marla for Rs1.6m to Rs2.5m and 1 Kanal for Rs2.6m to Rs4m; 5 Marla plots in

Izmir Town Lahore for Rs2.8m to Rs3.5m,10 Marla for Rs4.5m to Rs6.5m, 1 Kanal for Rs8m to Rs12.5m; 5 Marla plots in Park View Villas Multan Road are available at Rs1.6m to Rs3.7m, 10 Marla for Rs3m to Rs6.5m.

Wapda Town and LDA Avenue-1 had a fantastic year in terms of property prices. With development work underway, both have experienced impressive growth in the prices of 1-kanal plots.

Whereas, 10 Marla plots in Paragon City are being sold at Rs3.5m to Rs7.5m, 1 Kanal for Rs8.5m to Rs13m; 5 Marla plots in Lake City are available for Rs1.8m to Rs2.4m, 10 Marla for Rs3m to Rs3.7m and 1 Kanal for Rs5m to Rs7.2m; 5 Marla plots in State Life Phase-1 for Rs3.8m to Rs5.5m, 10 Marla for Rs6.5m to Rs7.5m, 1 Kanal for Rs7.8m to Rs12.5m; 1 Kanal plots in Sui Gas Lahore Phase-2 for Rs2.8m to Rs4m, 2 Kanal for Rs7m to Rs10.5m; 10 Marla plots in Valencia Town for Rs6.5m to Rs8m, 1 Kanal for Rs8.5m to Rs12.5m; 10 Marla plots in Wapda Town for Rs8m to Rs11.5m, 1 Kanal for Rs10m to Rs17.5m.

Property market experts said that prices for plots and homes in Lahore remained largely consistent with only minute increases and decreases in 2014, with no significant changes in rental prices across key areas of this provincial capital.

Fahad Hassan, a property advisor and CEO of Haq Bahu Real Estate, said that the market for plots in Lahore had an uneventful 2013 compared to 2014, when demand seemed to have dropped significantly, showing that not many buyers or investors were active in the market. Consequently, there were no major spikes seen in property prices in Lahore, he added.

“In 2014, 1-kanal residential plots in DHA Lahore showed a dip of more than 3pc. Similarly, plots of the same size in Bahria Town registered a decrease of around 4pc in prices during the same period,” he said. After upward revision in property tax by the Punjab government, the first half of 2014-15 has been a tough for the real estate sector, which has been struggling with decreased activity and sluggish price trends, Akbar Sheikh observed.

Noted real estate industry expert and Zaitoon Group MD Mian Ayaz Anwar said that with a view to overcome the lack of housing finance, the State Bank of Pakistan should take immediate steps to introduce investment bonds to generate liquidity for mortgage financing at affordable rate to develop housing sector that has potential to push GDP up to 9pc.

AMK Engineering Private Limited director and LCCI former vice-president Kashif Anwar said that the major reason, restricting the industry, was the lack of mortgage financing facility while people of low income group had no means to purchase home. They were forced to live in rental homes which obliviously did not generate liquidity, he maintained.

He said that the development of housing sector would not only provide houses to homeless but also increase economic activities in hundreds of related industries. He asked that the Punjab government to introduce a proper system for the assessment of property tax, as the officials responsible for collecting property tax were charging the levy as per their wishes and making money in the absence of a suitable tax collection system.
He demanded from the chief minister the establishment of a proper system for the assessment of property tax being collected from land or property holders. “Presently, there is no proper system to measure a property tax, as officials of Excise & Taxation Department are collecting the levy arbitrarily,” he added.

Source: The Nation

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