MRA – Oct 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 real estate market filled up the vacuum quickly and prices rose by atleast 30% in most areas. The surprising thing is that areas which are not in possession are also picking up momentum. Phase 9 prism is leading the charge and the main reason may be the rumors of possession in some blocks. This price rise was not unexpected and we already informed you in April 2020 about the expected increase. The big question however is should you invest or not in the present market?
This depends on the purpose of your investment, if you are planning to buy for your house etc why not. However, if you just want to make a speculative investment than you should think twice. The real problem here is not the price but the sheer number of plots and phases available, which triggers our supply and demand anomoly. On the flip side we have seen a huge slump from 2016 to 2020 already and we are now in an uptrending market, which should give us an average growth of 10 to 15% per year atleast. Corrections will remain part of the equation but instead of being viewed as negative, they should be considered as a chance for buying.
Although stats and logics do not support this as we need houses for the poor but we have been making socities to cater for rich. The upper class is now in a huge surplus of plots and in addition with DHA spreading its wings to other cities such as Gujranwala and Multan, so does the investment. On the economic front as well, we are in a global recession. However real estate market in Pakistan is largely speculative and reacts more to sentiments than logic at times.
In October we are seeing correction in some areas, which was expected after the increase in prices. This can largely be attributed to DHA asset ballot as well which is supposed to happen this month. I believe once the Ballot is done there will be some wonderful opportunities for you to secure plots on installments in DHA Lahore.
Rumors are that Govt will extend the given amnesty to comemrcial construction sector. However I will be careful, investing on rumors and will wait for the official statement in this matter.
DHA Phase 1 to 5
Phase 1 to 5 are fully developed and mature areas of DHA Lahore.Phase 5 does not exhbit the similar behaviour as Phase 6, 7, 8 or 9 and has been mostly stable with a little increase in price.
Commercial investments with an option of rental returns seems to be the best investment in these areas. Investing in residential plots is probably not suiteable.
Investment opportunity still exists in Goldcrest Mall apartments as we believe that the prices haven’t peaked. Now that the Mall is functional and expected partial possession of apartments is expected in Jan 2021, we will see solid growth in these apartments.
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 prone to any major correction as such, yes the activity may reduce and the prices may not rise any further. In my opinion the prices have peaked for now and the chances of increase are bare minimum.
Contrary to previous belief commercial investments are going to be stable as well. In addition floor wise selling will create liquidity and increase commercial transactions in the market.
MB commercials provide the best rental income percentage in DHA Lahore among all other commercial areas. In my opinion if you have the resources this is the best investment in DHA Lahore as of now. As more than 80% rentals in MB commercials are related to real estate activity, tenancy issues stand null and void. This also makes it a safer rental commercial while retail commercial areas still suffer due to closures etc.
a. You can safely invest/buy residential plots in DHA Lahore phase 6 for building your home or general investment.
b. You can buy commercial on Main MB for rentals income.
DHA Phase 7
DHA Lahore Phase 7 still offers possession plots with the lowest price tag for a 1 kanal (500 yds/4500 sqft) in DHA Lahore. It surely has out performed my expectations with prices rising more than 40% in 3 months defying all logic and stats. Relief package coupled with a real estate friendly budget has made it a hot spot of short to mid term investments.
The market may remain stable for a couple of more months or show minor correction of 10%. If I had plots in Phase 7, I would be happy to take exit on these higher prices, instead of putting my profits at risk.
Although I am not a big fan of commercials in Phase 7, it does not change the fact that they are at their lowest. If you are willing to be patient it could be considered as a decent option for rental generation.
a. It is a good option for short selling and 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
Just like Phase 6, I believe that Phase 8 proper is prone to any major correction. It still is the the safest bet in DHA Lahore. It fills the bill with all it has to offer for investment vis-a-viz house construction. No matter what you are planning it is suiteable for you. Even if you are not looking for short term gains, Phase 8 proper surely is the strongest candidate for long term performance.
Broadway commercial One of the best commercial investments you can make today, in long term perspective. Prices went up by atleast 30% during the present rally but are now down by 10% as we face the correction. If you can build a Plaza today, rent it out, this will give you teh best returns over time. However with the Dolmen Mall coming in Phase 6, we can assume that retail activity in Phase 8 Broadway might not develop. 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 went up to 260 Lacs for Malikpur, and now came all the way down to 225 Lacs. It is showing a lot of valoatility and can be a good buy for short selling at lower prices.
Z Ivy green is not some place you would want to go in these times of uncertainty.
a. We recommend to buy residential plots for investment or house construction purpose .
b. Buy 4 Marla Shivpur or Malikpur files in Phase 8 Ex Park View at lower prices.
c. Buy 4 Marla commercial between 400 to 500 Lacs and 8 Marla between 700 to 950 Lacs in good areas of Broadway for rental prupose.
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
9 Town has been mostly silent and only gained a maximum of 10%. It seems invetsors are not willing to invest at this moment and have concentrated in other places. I think it may just grow steadily over time and will not show speculative investment opportunities in future.
a. It is best suited if you want to build your house.
DHA Phase 9 Prism
Prices in 9 Prism went up 20 to 30% against my expectations although amnesty scheme is not in effect here. This is possibly due to the expectation of possession in certain blocks and rapid development which coincided with the upward move of the market.
Anyways its a good news for the investors there and most importantly that its upward trend is not related to the amnesty. This may well last for some time even after the end of amnesty in Dec 2020.
It will be interesting to watch 9 Prism after possession as our previous experience is not very positive when it comes to this
a. This is a great time for an exit and you can re-enter on a correction.
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.
a. It is better to wait for a while.
DHA Phase 11 Rahber
The prices in Phase 2 ext or DHA Rahber sector 4 which has balloted in 2019. Although a non possession area but the prices are pretty low, making it an attractive investment for next 2 to 3 years time frame.
a. The residential plot as of now can also give a very good return in 2 to 3 years time if we buy at lower prices.
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Captain Shahnawaz Bhatti (Retd) is the founder and CEO of Imlaak which is based in DHA Lahore. He has represented a large number of investors in a wide array of real estate transactions. With more then 8 years experience in commercial real estate, marketing and real estate project management, he has a proven track record of guiding national and multi-national clients with their real estate portfolios and asset management. He is also an active real estate blogger and offers free advice through his articles. Imlaak handles real estate transactions valued at well over 9000 million every year. Our specific area of expertise includes strategic planning , transaction management, asset trading, partnerships & venture capitalist with experienced business owners, entrepreneurs, inventors & some proven-concept start-ups. In a very short time, Imlaak has introduced a new vision of professionalism, transparency and hard work in the real estate industry. ‘There is no better time to invest in real estate than today’ Captain S. Bhatti