Taxation Changes Show a Positive Impact on Islamabad’s Real Estate Sector [Analysis]

Several key real estate locations in Islamabad generally comprise developed, mature markets (which boast a large scope for rentals), but the plot options – for genuine buying and investment purposes – are few and far between; giving rise to little market activity to speak of.

This marketplace dynamic was impacted noticeably by the anticipation associated with the revised real estate and taxation policies slated for inclusion in this budget – which served to temper its progression.

Sector F-11’s market presented a good case scenario marking the influence of the first factor.

The sector, as such, features a booming market for pursuing rental, commercial and residential property options, but not so much for realizing capital appreciations. It came as no surprise, that the rates of 10-marla and 1-kanal plots in this sector remained stable.

Similarly, plot prices remained relatively stable for the 10-marla and 1-kanal unit options in Sector E-11 – with an inconsequential increase to both rates.

DHA Islamabad’s market was similarly seen to ‘peak and mature’, despite it being a much newer construction. The project’s popularity, as such, has been considered responsible for ensuring its quick maturity. Moreover, its prices were noticeably impacted by the prevailing market conditions, so even the newer, less-populated areas showcased stable rates.

Overall, the prices for 10-marla plots in DHA Islamabad remained stable, while the 1-kanal plots’ prices recorded a major upsurge.

Bahria Town also saw its activity decline, recently, for a number of similar reasons; with the project’s rates seen to remain stable for both 10-marla and 1-kanal plots.

Sector B-17 and Gulberg Residencia, however, showcased a different trajectory, because despite catering to every other influence in the market, they persisted with their ongoing infrastructural development activity and retained the long-term investor (hopeful of securing lucrative returns).

B-17 saw the prices for its 10-marla plots appreciate, while those of the 1-kanal plot options remained relatively stable.

Gulberg Residencia also registered noticeable market activity, with its 10-marla plot prices seen to appreciate moderately. However, the rates of 1-kanal plots remained stable.

Market Report: Islamabad, Karachi, Gujranwala, Faisalabad, and Multan

The situation of the country’s property market has remained largely stable with the sector seen to register a general decline in prices. The market, in an attempt to contextualize this observation, has been correcting itself over time, and the current government is looking to continue on the same trajectory.

This development has boded well for genuine buyers, who now find themselves able to buy their dream properties at affordable rates. Discerning investors, with good holding power, have also gained from this scenario by scoring idyllic property options at cheap rates and waiting for the market to boom again.

Like the rest of the country, Lahore’s property market showed stable progression for a variety of reasons. In the particular case of DHA Phases I-VI, this dynamic has been attributed to an abundance of plots which generally only interest genuine buyers.

In contrast, the other DHA Lahore phases (from VII-IX) have been referred to as ‘investor markets’ – with their stability easily explained by the slow pace of the market, as well as their investors’ wait for clearer policy directions.

The situation in Bahria Town Lahore, Bahria Orchard, Wapda Town, and LDA Avenue – the other big options for homebuyers and investors in the city – was seen to mirror the market dynamic in place in the abovementioned DHA phases.

Karachi has remained similarly stable, with DHA Karachi, DHA City, Gulshan-e-Iqbal, and Bahria Town Karachi showing little to no price appreciations. Significant development work, however, has been taking place in the city’s other locations. Scheme 33 and Gulshan-e-Maymar, in particular, recorded a lot of investment activity.

In Gujranwala, Faisalabad and Multan (cities which witnessed a lot of new construction work in the past), a ‘slow down’ was observed in the pace of infrastructural developments,  an issue which was seen to inhibit the progression of their markets’ otherwise upward trends.

Once the development work in these locations gets back on track and new avenues for investment open, the real situation of the real estate market will become much more apparent.

Summation

The real estate market was dominated by genuine buyer activity, as investors were waiting for the impact of the government’s new policy regulations (now revealed) to become apparent – particularly with regard to property price adjustments.

Based on the trends observed, the country’s property sector provided for more attractive monetary holding options for genuine buyers (people interested in taking up residence) than short-term investors.

Zameen.com CEO Zeeshan Ali Khan said,

This month’s market trends indicate that real estate is primarily a buyer’s domain. Genuine buyers, in particular, can reap many benefits from this situation. Following the announcement of the government’s Budget for FY 2019-2020, and the implementation of its espoused price-correction measures, investors will know how to change tack and innovate their approach towards the sector.



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