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Extraordinary MRA – April 2020 DHA Lahore Property Market

 Extraordinary MRA – April 2020 DHA Lahore Property Market

Disclaimer : MRA (Monthly Real Estate Analysis) – March 2019 DHA Lahore Property Market Report is a general guideline and does not cover all aspects of the market. The real estate trends vary even within blocks of the same phase and for a layman it gets very complicated and confusing. You can now download our APP from Google store and read latest news and developments or book an appointment for consultancy.

Present Market Condition

The property market of DHA Lahore has been at a stand still and therefore we did not posted our monthly report since october of 2019. However things are going to change after the pandemic covid 19 ravaged through our world resulting in a global economic recession. As of now the real estate markets are totally closed because of the lock down. DHA Lahore transfer office is closed as well as all the offices of real estate agents. This has resulted in a complete shut down of transactions for which there is no past precedence.

This is no doubt an extraordinary situation and demands extraordinary measures to overcome the new challenges.

We are at a stand still and it is probably going to stay as such throughout April. It is time to re-evaluate before moving forward as everything that we perceived earlier is not applicable anymore. State bank of Pakistan is forecasting a decrease of 1% in GDP which is obviously going to effect all businesses including real estate.

However recessions are always forbearer of the uptrends in days to come. This is also true for the present recession and those who understand it will win and those who do not will lose.

In addition there are few more factors which are going to play a big role in days to come.

  1. Government has reduced CVT & Stamp duty to only 2% on your transactions. This step was taken as a tax relief package for real estate in the present scenario. This will surely cushion real estate as the economies stumble and provide a soft landing platform.
  2. In addition Government as of 3rd April 2020 has announced a detailed tax  relief package for construction industry which will greatly impact construction projects.
  3. The most important aspect which effects investors is that they will not be required to share there source of income if they invest in construction projects.
  4. DHA Lahore is planning to introduce floor wise selling of commercial plazas. This will help in improving over all liquidity in the market and will have long term effects on commercial real estate in DHA Lahore.

DHA Phase 1 to 5

Phase 1 to 5 are fully developed and mature areas of DHA Lahore and are less likely to be hit by a recession. However commercial properties may suffer a bit in days to come in case small businesses suffer due to recession. It will be interesting to watch how things play out in months to come once floor wise selling is permitted in commercial plazas. I believe if you wish to buy a plot for your own home, the present recession will have very minimum impact on plot prices in these phases.

The sale of brand new houses will suffer a bit due to closure of real estate offices and we may see builders profits to be squeezed a bit.

However to be on safe side wait a bit for investing in commercials in these areas till things are more clear and the launch of floor wise selling begins.

Investment opportunity still exists in Gold Crest Mall apartments as we believe that the prices still haven’t peaked. The prices will remain stable here at 20000 per sqft for some time. This is more applicable after the Government announcement of relief to construction industry.

Phase 5 M block has remained stable. The commercials however, can be a good investment from a future perspective as they are at their lowest.

DHA Phase 6

DHA Lahore Phase 6 is also more likely to follow the path of phase 5 in general. There will be minimal impact on prices of plots, however brand new house prices may suffer a bit for some time.

Commercial plots are going to lose some value over time, however commercial plazas will sail through with lesser impact due to floor wise selling which will create liquidity in the market.

MB commercials provide the best rental income percentage in DHA Lahore among all other commercial areas. In case tenancy issues arise in Phase 6 MB, we may see slight fluctuations in the price but over all it remains in the safe zone.

Recommendation

a. You can safely buy residential plots in DHA Lahore phase 6 for building your home as it will not be much effected by the recession.

b. You should wait and see for an opportunity to buy commercial on Main MB for rentals.

DHA Phase 7

DHA Lahore Phase 7 offers possession plots with the lowest price tag for a 1 kanal (500 yds/4500 sqft) in DHA Lahore. However considering the present scenario and availability of plots in this phase we will be reluctant to invest just for capital gains purposes.

Commercials in Phase 7 are at their lowest and it could be considered a decent option for people with lesser budget for rental commodity 5-6 years down the line.

Recommendation

a. I do not think so you should be investing here unless its for the purpose of making your own house.

b. Long term holding of a commercial plot for future rentals may work for some people.

DHA Phase 8

Phase 8 will sail through this bad time but to be on safe side you should invest with a 3 to 5 years time frame in mind. In my opinion it is the most undervalued risk free commodity today. The commercial properties have already lost 40 to 50% of its value over last 4 years and I doubt it will go down any further.

Broadway commercial One of the best commercial investments you can make today, and the prices are very low, the reason for that is the general overall low trend plus the lack of occupancy of residential plots. Commercials are dependent on the residential occupancy from a rental standpoint primarily. Many companies and banks however, have either made their offices or have procured a plot for future purposes.

Ex Park view of Phase 8 is a very good option for residential buyers especially for 2 kanal buyers. The prices are lower. You also tend to find a bargain. Generally a 2 kanal plot would cost you around 4-5 crores which is a pretty decent price tag.

4 Marla commercial files of Ex Park View The prices are on the lower side. There are strong rumors of ballot anytime soon. Putting aside the rumors which we get to hear every now and then, I believe it is still a strong buy as of today.

Z Ivy green is not some place you would want to go in these times of uncertainty.

Recommendation

a. We recommend to buy residential plots for investment for a long term objective of 5 years max.

b. Buy 4 Marla Shivpur or Malikpur files in Phase 8 Ex Park View.

c. We will now recommend you to buy 4 Marla commercial between 400 to 500 Lacs and 8 Marla between 700 to 950 Lacs in good areas of Broadway.

d. It is better to avoid Z ivy green as it is still an under developed area and in general we do not want you to invest in such places.

DHA Phase 9 Town

I think prices will remain afloat here as well but we may not see any increase any time soon.

Imalak has launched a project of 5 Marla homes in 9 Town on installment plans of up to 3 years. It is a great solution for any one who is looking for a budget house in DHA Lahore. It also gives you an opportunity to build your house to your own liking and pay as you are comfortable. imlaak homes installment solutions are revolutionary and offer you a 100% flexibility.

Recommendation

a. It is best suited if you want to build your house or buy one on installments such as imlaak homes.

DHA Phase 9 Prism

As suggested it is best to stay clear of under developed areas and files etc  so while I do not see a huge downside in 9 Prism as of now I will suggest that we wait and see for things to be more clear.

Recommendation

a. Hold it for long-term or sell during an upswing.

b. Buying is recommended only long-term investment of 5 years and more.

DHA Phase 10

A no go area for now, its best to invest in developed areas of DHA Lahore. However if you have a long term objective of 7 to 10 years than you can look into it.

 Recommendation

a. It is better to wait for a while.

DHA Phase 11 Rahber

The prices in Phase 2 ext which has balloted in 2019 have really dipped and offer a good opportunity to invest in this area.

Recommendation

a. The residential plot as of now can also give a very good return if we buy at lower prices.

USE OUR DISCUSSION FORUM  IF YOU HAVE A QUESTION AS WE CAN ANSWER IN DETAIL AND OTHER MEMBERS CAN ALSO POST THERE OPINION FOR A FRUITFUL DISCUSSION.

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