Pakistan’s real estate market in positive stride
A general improvement in law and order and a relatively stable period in the country’s political lifecycle has ushered in happier times for Pakistan’s economy.
A general improvement in law and order and a relatively stable period in the country’s political lifecycle has ushered in happier times for Pakistan’s economy.
The country is steering away from terrorizing shadows of the past decade that saw the citizens always fretting about the next bomb and gun attack. But peace has returned, with decisive actions against terrorists in the north and criminals in the south making way for an economic upheaval.
Many who were once vying to leave the country for good have started hoping and investment once flowing out of the country has found a way back, especially into the real estate sector.
At the end of the third quarter of the ongoing year, the realty markets in Lahore, Karachi and Islamabad painted a sunny picture for investors and owners alike.
Several localities in Lahore offered a new record of returns on rentals, while property brands like Bahria Town and DHA remained on top of the lists in a number of cities.
Per Zameen.com’s search trends, DHA Lahore topped the search charts in Punjab’s capital followed by Gulberg, Johar Town and Askari, respectively. Catering to various socio-economic classes, the densely populated locality of Allama Iqbal Town, ranked the fifth most searched locality in October, mainly due to its low rental rates and frequency of 10 Marla properties.
Lahore Cantt, on the other hand, offered the highest rental yield at 4.68%. The locality also registered the highest average rental rates for both 1 Kanal and 10 Marla houses, PKR 132,221 and PKR 89,472, respectively.
In Islamabad, DHA was again the most searched locality owing to its world class facilities. While F-11 came second on the popularity list, it returned the highest monthly average rental rate in Islamabad with values reaching up to PKR 199,866. Sector I-8, F-10 and G-9 wrapped up the list of five most searched localities in the national capital.
The average monthly rent of 1 Kanal houses in DHA Islamabad was recorded at PKR 83,918 in Q3 2015, offering owners a 3.01% rental return. Same sized houses in Bahria Town offered up to 4.12% monthly rental yield at PKR 117,389, the highest in Islamabad.
Southwards in Karachi, there was a clear preference for rental spaces in Gulshan-e-Iqbal over DHA Karachi. While Gulshan Town’s central location and proximity to city’s main roads are important factors for its popularity, the trend may also be a result of DHA Karachi being the costliest locality for renting. One Kanal and 10 Marla houses in Karachi fetched average monthly rents of PKR 194,083 and PKR 133,760, respectively.
The third most popular locality for renting houses in Karachi was Gulistan-e-Jauhar, followed closely by North Nazimabad, a town that offers spacious avenues, tree-lined roads and numerous commercial areas in the crowded city. A more cost-effective housing solution for the middle-income class, Federal B Area, ranked fifth in the popularity index.
In terms of rental returns, Gulshan-e-Iqbal again topped the list with a yield of 5.04%, while Gulistan-e-Jauhar was second with average yield of 4.40%.
The heightened real estate activity in the country’s major urban centers is having a positive effect on the realty markets in smaller towns like Gujranwala, Bahawalpur and Sialkot as well. Developers are eyeing these yet-to-be-tapped markets by offering bespoke housing solutions in the guise of gated communities with high end facilities like gymnasiums, mini zoos and lush green public parks.
Let’s hope the trend continues for a greater benefit of not only realty developers and investors, but also for the country’s economy that looks to make up time lost to security and terrorism troubles.