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Property Trends in Islamabad/Rawalpindi in 2020-21

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Islamabad and Rawalpindi is currently going through a property and real estate boom. The prices are sky high and are going even higher. Prime locations in these cities are being chased by property hunters and the prices are already beyond imagination. The prices have risen almost five times of what they were a couple of years back. People have stopped selling in this market and hence it has become a sellers’ market. The wait for further increase in the price is holding buyers at bay and sellers in the wait. But is it worth it? Are property prices all set to rise further or is the bubble burst just around the corner?

Prices in Topcity-1 doubled in last 4 months. Surge in construction activities of residential and commercial projects buoyed the hopes of investors for short term gains.

Price of a 25×40 plot in D-12 developed sector has soared to 1.5 crore from 92 lac in 6 months

Same prices upward trend witnessed in G-13 and G-14

Price of a 25×40 plot in E-12 undeveloped sector reached 1 crore from 60 lac in last 6 months

Similarly 5 Marla plot in I-15 undeveloped sector is now 50 lac whereas it was on 38 lac few months back.

Prices went up by 60 % in Undeveloped CDA sector of C-15 and C-16

CDA sector I-12 is another sector where prices rose almost 75% in last one year.

DHA Islamabad phase 2 and phase 5 was and still is a popular place for investors and genuine buyers to park their money where prices still appreciating and rose by 60-70 % in last two years.

Rise in prices of plots in Bahria Town phase 8 and Bahria Enclave was nominal and could not compete with CDA and DHA in this race.

Societies like Gulberg, Naval Anchorage, Jinnah Garden also experienced the price hike.

Construction of PWD interchange is in progress, could push prices more in societies situated

On both side of Islamabad expressway.

Farmhouse plots in Gulberg Green and Naval farms on Simly road also went up by 30-50%.

Reasons for price appreciation.

  • Pakistan’s high inflation pushing up real estate prices up.
  • With reforms and incentive packages being introduced by the incumbent government, the country’s real estate sector witnessed considerable growth.
  • Reduction in taxes and CVT/Stamp duty.
  • The Demand for urban housing presently amounts to around 350,000 units per year. However, the supply only amounts to 150,000 units per year.
  • Covid-19 has badly affected the other businesses like travel, hotel, medical, transport, import/export etc. Investors from these sectors also turned to real estate to park their money.
  • Prices of properties in Islamabad are so high because it is Capital (Federal State). Secondly, it is one of most finest and most developed city in Pakistan. Thirdly, It is surrounded by iconic and scenic view of Margalla hills.
  • Prices of property is higher because Islamabad is experiencing a boom in high-rise building in blue area and other housing societies holding major offices of country.
  • CDA is very slow in developing new sectors.

 

The Buying spree in long term projects.

Despite ongoing political and pandemic crises, real estate market has been quite active in the second half of year 2020 and investments are pouring in from local investors as well as overseas Pakistanis. There are multiple investment venues right now in the twin cities which are attracting major chunk of investment.

A lot of people are looking at this as the right time to invest into the market. They are investing and buying housing projects that will still take years to develop. Take the example of the various housing societies that are coming up a few kilometers from the outskirts of these major cities. Most of these societies have plots that are priced in lakhs.

Societies like Capital Smart City , Rudn Enclave and Blue world city are offering plots for less budget clients and investors on installments. These societies are using Rawalpindi Ring Road project to their advantage to attract buyers.

 

The Downturn Point

Buyers need to be aware of the downturn point or the ceiling of the current rise. There are very little original buyers who are looking to invest in property with a long term goal in mind. The rest are small term investors who are simply looking to buy small pieces of land and later sell it off for higher rates. Society owners are also buying files in bulk so that later on they can create an artificial deficit for files and sell these files for exorbitant prices. Most experts will suggest to you that the bubble will burst very soon. A lot of people are now getting to dealers so that they can sell off their plots. A lot of rumors are also doing the rounds that big time players have resorted to massive selling in the fear that the real estate bubble will burst very soon.

 

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