Investors’ confidence in Pakistan’s economy seems to be on an upward trajectory as reflected by the country’s booming real estate sector which is showing double-digit return on investment in metropolitan areas, a report says quoting zameen.com’s annual property review.

In this regard, I will start a series of analyzing the property trends in Pakistan. Karachi is the biggest metropolitan city of Pakistan. It also is regarded as the financial hub of Pakistan. Given, the importance of City of Karachi with respect to its financial activity, I will try to explore it.

DHA & Bahria Town Properties are for sale

Investors’ confidence in Pakistan’s economy seems to be on an upward trajectory as reflected by the country’s booming real estate sector which is showing double-digit return on investment in metropolitan areas, a report says quoting Zameen.com’s annual property review.

In this regard, I will start a series of analyzing the property trends in Pakistan. Karachi is the biggest metropolitan city of Pakistan. It also is regarded as the financial hub of Pakistan. Given, the importance of City of Karachi with respect to its financial activity, I will try to explore it.

Currently, there are 28,000 properties listing on Zameen.com for city of Karachi. The graph below shows the listing of Properties in Karachi in different locations. There are currently around 5400 listing for DHA defence followed by Bahria Town Karachi with 3600 listings. These two are regarded as investors save havens, therefore we may infer with properties prices already hiked to their peak investors want to realize their profits.

Apart from DHA and Bahria Town Karachi, properties in Gulistan Town which includes Gulistan-e-Jauhar, Gulshan-e-Iqbal with 3100 and 2500 listings respectively. Clifton and Cantt area has also remained famous with respect to property with cumulative listing of 2300.

100-300 Square yard Properties are most Traded

Properties are regarded as big ticket items as they are priced in millions of Rupees. Given, the inhabitants of Karachi are generally regarded as middle class, it cost fortune to build or buy a house. Small property that ranges from 100 to 300 Sq. yd. is more in demand than large properties. As of November 2017, there were around 24,000 property listing ranging from 100 to 300 Sq. Yd. i.e. around 78 percent of total listing on zameen.com

DHA Defence is the Posh Location

Given, property as an asset has been of the most interest in the last 2-3 years, investors has sought to DHA defence where the properties prices have hiked the most. The average price per Sq.Yd in DHA defence is Rs. 173 thousand which is the highest in Karachi with respect to location.

Clifton, which is an affluent suburb located in the Saddar of Karachi, is the second highest asking price. According to a report, Clifton is one of the localities in Karachi where real estate activity remains on the up despite the overall state of law and order in the city. In Clifton, the average price per Sq.Yd. is Rs. 1,39,000 which is the second highest in the city of Karachi.

With respect to the top ten listings on Zameen.com, Bahria Town Karachi has the lowest price per Sq.Yd(Rs. 43,000). The Bahria town includes the listing of Bahria Apartments, Bahria Homes, Bahria Sports City, Bahria Heights, Bahria Paradise and all other project by Bahria group in Karachi.

Complete Houses are more expensive than Flats

When analyzing the type of property i.e. a house or a flat, a complete house is sells at a better price than a flat/single portion. A house on average sells at Rs 137 thousand while a flat/single portion sells on average at Rs. 75 thousand.

However, it is important to dissect the type of property with respect to location. House type in all top ten location of Karachi is expensive when compared to single portion or flat type. Clifton and DHA defence again has highest average price per Sq.Yd. However, the differential between the average price per Sq Yard of house and flat/single portion is approximately 50% in all major vicinities of Karachi. This may be because houses are more in priority then flats therefore increases demand for them. Recently, there has been substantial construction of residential flats which although have a high ask price but due to the trend witnessed they might get that high price for their investment.

As discussed earlier, the size of the property has an impact on the average price per Square Yard. Therefore it is important to compare the Size of the property and average price. A general trend can be witnessed from the graph below. For some localities such as Bahria Town, Cantt and Clifton, the smallest size property i.e. under 100 square yard property has high asking price per square yard. The asking price drop instantaneously for the next big property and then there is a linear increase in the asking average price per Square yard.

For other neighborhoods, although there isn’t a clear trend but with an increase in property size, there is an increase in average price per Square Yard.

Note: I would like to reiterate that these are my own views and are independent from the organization I work at. Thanks for reading