This in the continuation of the Karachi series which I started here. In this post, I will explore and visualize the Bahria town Karachi which is the largest private real estate developer in Asia.

Bahria Town is a Rawalpindi-based privately owned real-estate development company which owns, develops and manages properties across Pakistan. Bahria Town Karachi is regarded as the investors’ heaven as there has been hike in the Karachi property prices as a result of improved law and order situation.

According to a report, Pakistanis stationed all over the globe have developed an interest in the project, which explains why it remains the most searched locality in Karachi on Zameen search Trends. To probe this claim, I will analyze the Bahria Town Karachi by comparing three period (i.e July 2016, Nov 2017 and January 2018)

Number of Listings on Zameen.com
period Number of Listings
Jul 2016 1816
Nov 2017 3618
Jan 2018 2732

There has been an upsurge in for-sale listing of Bahria town properties from July 2016 to November 2017, an increase of 96%. The increase in the listing was as a result of Supreme Case has imposed a ban on the illegal construction work that was being carried out on the phase III and IV of the controversial Bahria Town here in the Port City. Risk averse investors saw this as a good point to do profit taking. However, when things were settled down, there was a sudden decrease in for-sale listing from 3552 to 2711 listings from November 2017 to January 2018.

To better understand what factors are contributing to the demand and supply of the properties, it is pertinent to analyze them with respect to the Schemes/projects and size of the property. Out of the many projects, the main projects/scheme under Bahria banner are Paradise ,Sport City,Bahria Heights,Bahria Homes Karachi,Bahria Apartments.

The Bahria projects seems to witness different trends with respect to listings on zameen.com for its schemes over three years. For Bahria Heights, Bahria Homes and Paradise, the listing on zameen.com has decreased over the time. However, Sports City and Bahria Apartments has witnessed positive trend. The major anomaly can be witnessed in Bahria Aprartments where the change in sale of properties from July 2016 to November 2017 was whopping 276% increase. The graph below shows the trend of listing on the real estate portal over three years.

However, to solidfy our analyses, we also assessed the size of the property. There are five major broad area categories i.e. 100-125 Sq.Yds., 125-200 sq Yds., 200-300 Sq. Yds., 300-400 Sq. Yds and 500-100 Sq. Yds Category. Most of the listing on the portal was for category ranging from 200-300 Sq. Yards in all three years. There is a general trend in the listing of all size categories as there was a substantial increase in listing from 2016 to 2017, then the listing fell in January 2018 as shown below

Bahria Apartments Generates Highest Returns

Primarily, Bahria Town Karachi is viewed as a project that serves investors or buyers with long-term investment plan. To compare, how much prices have appreciated over time for Bahria Town Karachi, we calculated average prices over three year time. As expected, the prices have increased over three year time. In July 2016, the average price of Bahria Town Karachi Property was Rs. 5.86 million while in Jan 2018, it was Rs. 9.3 million, an increase of 58% as shown below

However, the better estimate would be comparing the average price per square yard rather than absolute price. While comparing the average price of Bahria Town Karachi property per square yard the increase is of whopping 107% from July 2016 to Nov 2018 as shown below.

500-100 Square Yard Sized Property are High in demand

When comparing the prices of the properties, we analyzed the average prices of with respect to the property size as shown below.

If we now compare the average price per Square yard, 500-100 square yard category are most highly priced with the price tag of Rs. 73,600 per Square yard and Rs. 75,500 per Square yard in Nov 2017 and Jan 2018 respectively. With respect to price appreciation, the 200-300 square yard category has witnessed the highest change with 21%. The prices of other size categories have increased as well gradually except for 300-400 square yard category as shown below.

Now, we compare the prices with respect to type of property i.e. __ Farm House, Flat, House and Plot File__. Farm houses on average are highly priced but there average prices has decreased from Rs. 42.3 million in Nov 2017 to Rs. 30 million in Jan 2018, a decrease of 30%. However, the average price for flat and houses have increased gradually over three years

However, when comparing the average price per Square Yard with respect to type of property, the farm house prices have increase substantially i.e they have increase from Rs. 50,000 in Nov 2017 to Rs. 120,000 in Jan 2018, an increase of 140%. The difference when comparing the average price and average price per Square Yard is as result of increase in number of farm houses over the period of 5 months. Therefore, it can be inferred that farm houses is the best bet with respect to earning returns.

Major Bahria Town Schemes

There are currently five major schemes in Bahria Town Karachi. They are Paradise, Sport City, Bahria Heights,Bahria Homes Karachi,Bahria Apartments. Bahria Paradise are the most expensive project where the average price of property was Rs. 38.2 million(3.82 crore). Bahria Paradise plot sizes are larger than other projects resulting in high prices.

Average Prices per Square Yard of Major Bahria Town Karachi Schemes

Sports City

The 200-300 Square Yard category witnessed the highest increase from Rs. 35,000 per square yard in Nov 2017 to 74,500 per square yard in Jan 2018. This is an increase of 113% in just 3 months. The prices of other categories in Sports city have remained stagnant over last quarter.

Bahria Heights

There has been no appreciation of in Bahria Heights in any category as shown below

Bahria Homes karachi

In Bahria Homes Karachi, the 200-300 square yard category witnessed the highest positive change from Rs. 41,900 in Nov 2017 to Rs. 55,400 in Jan 2018, an increase of 32% in the last quarter. Other categories have remained stagnant.

Bahria Apartments Karachi

The scheme has been successful as there has been a gradual increase all categories over three years as shown below.

Conclusion

From investment point of view, we can infer that a rationale investor who wants to take real-esate exposure can generate positive returns on investment. Looking at the current Bahria Town karachi dynamics, its feasible to invest in:

  • Sport City in 200-300 Square Yards Category
  • Bahria Homes in 200-300 Square Yards Category
  • All size categories of Bahria Apartments karachi