Pakistan Property & Real Estate News

Pakistan to revise downward macroeconomic indicators

Pakistan will revise downward the real GDP growth rate, inflation, fiscal deficit and current account deficit besides moving ahead with managed float exchange regime over the next 23 months for obtaining $7.6 billion loan from the Fund under the Standby Arrangement, the IMF states on Tuesday.

Under the agreed macroeconomic indicators between Islamabad and the IMF, Pakistan’s external debt is bound to rise sharply and will touch 31.4 per cent of the GDP in fiscal year 2008-09 against 26.5 per cent in last financial year 2007-08. The external debt will further go up to 33.2 per cent of GDP by 2009-2010.

The projected real GDP growth rate has been lowered from 5.5 per cent to 3.4 per cent during the fiscal year 2008-09, which is estimated to go up to 5 per cent of the GDP by 2009-2010. The inflation target has envisaged at 23 per cent during the current fiscal year 2008-09 from earlier set target of 12 per cent. The average CPI based inflation will be brought down to 13 per cent by 2009-2010.

The Gross National Saving in percentage of GDP is estimated at 13.5 per cent for 2008-09 and 15.7 per cent for 2009-2010. The Gross Capital formation in percentage of GDP is projected at 20 per cent for 2008-09 and 21.3 per cent for 2009-2010.

Pakistan and the IMF also agreed to scale down fiscal deficit target from 7.4 per cent of the GDP in 2007-08 to 4.2 per cent of the GDP for the current fiscal year.

Both sides also envisaged to scale down the fiscal deficit further to 3.3 per cent of the GDP for the next fiscal year 2009-2010.

The overall debt in percentage of GDP will be hovering around 54.6 per cent by 2008-09 which will be slightly decreased to 52.4 per cent by 2009-2010. It means that the domestic debt will be decreased while external debt will rise in the next fiscal year.

Pakistan and the IMF also projected to curtail Money Growth (M2) in the current fiscal year to 10.8 per cent from 15 per cent in 2007-08. The money supply growth is estimated to grow by 15 per cent in next fiscal year 2009-2010.

Both the IMF and Pakistan also agreed to revise projections for the current account deficit (CAD) for the current fiscal year, which will remain hovering around 6.4 per cent of the GDP from 8.4 per cent of the GDP in previous fiscal year. The CAD has been projected at 5.7 per cent of the GDP by the next fiscal year 2009-2010.

Pakistan and IMF agreed to maintain foreign currency reserves at the level of $8.591 billion by end June 30, 2009 which will be jacked up to $11.291 billion on June 30, 2010.

The IMF’s Executive Board has approved a $7.6 billion loan for Pakistan to support its program to stabilize and rebuild the economy while expanding its social safety net to protect the poor.

The 23-month Stand-By loan will enable the government to implement a stabilization program that envisages a significant tightening of fiscal and monetary policies to bring down inflation and reduce the external current account deficit to more sustainable levels. The program seeks to address current macroeconomic imbalances while protecting the poor and preserving social stability in the South Asian country of 170 million people.

“By providing large financial support to Pakistan, the IMF is sending a strong signal to the donor community about the country’s improved macroeconomic prospects,” said IMF Deputy Managing Director Takatoshi Kato.

“The Government’s program has two objectives: first, to restore overall economic stability and confidence through a tightening of macroeconomic policies, and second, to do so in a manner that ensures social stability and adequate support for the poor during the adjustment process,” said Juan Carlos Di Tata, the IMF mission chief to Pakistan.

The Pakistan authorities have already taken some difficult steps to achieve these objectives: energy subsidies have been cut and the interest rate has been increased to tighten monetary policy. The authorities’ program for the coming 24 months envisages a number of additional steps.

The State Bank Of Pakistan (SBP) will act on monetary policy to build its international reserves, bring down inflation to 6 percent in 2010, and eliminate central bank financing of the government. The program includes measures to improve monetary management and enhance the SBP’s bank resolution capacity, and avoid the use of public resources to support the stock market.

Expenditure on the social safety net will be increased to protect the poor through both cash transfers and targeted electricity subsidies. The fiscal program for 2008/09 envisages an increase in spending on the social safety net of 0.6 percentage points of GDP to 0.9 percent of GDP. Pakistan will also work with the World Bank to prepare a more comprehensive and better targeted social safety net program.

The financing from the IMF will help to ease the path of adjustment and will provide a strong signal of support to the international community. Of the $7.6 billion loan, $3.1 billion will be made available by the IMF immediately to strengthen the reserve position. And the regular monitoring of the economy by the IMF will show how the macroeconomic objectives set by the Government are being met and whether they need to be adjusted in the light of changing circumstances.

“It is important to point out that the program-and its conditionality-is based on the targets and measures that the authorities have themselves set for the next two years. The IMF is convinced that the best implemented programs are the ones that are home grown and fully owned by the country,” Di Tata said.

Alongside the IMF’s financial support, there is an urgent need to mobilize additional donor support to strengthen Pakistan’s resilience to potential shocks, help finance the expanded social safety net, and allow for higher spending on development programs. “The Fund stands ready to participate in any donor meeting to provide the economic and financial analysis that could underpin expanded support.”

Success of the program could be affected by a number of risks. They arise from security and implementation uncertainties, a more severe-than-anticipated slowdown in economic activity in trading partners, and lower-than-expected private capital inflows. “Sustained and forceful implementation will be key to the success of the program,” Di Tata stated.

British buyers in the Alps buck the trend on credit crunch caution

Bucking the trend among second-home buyers cautious about signing-up to off-plan purchases in the wake of the credit crunch, a leading developer in the French Alps reports that a quarter of the buyers of properties sold off-plan in its latest new scheme are British.

As construction work gets underway at Le Telemark, a brand new residence de tourisme of 57 ski-in/ski-out leaseback apartments at Tignes Le Lac, the French mountain and lakeside property specialist the MGM Group reports that 39 of the properties already have been sold with ten of them being snapped up by UK buyers.

Says Nathalie Turchet, MGM’s London-based UK sales manager. “Clearly the appeal of these properties to British buyers is that they meet three requirements – a high quality second home to enjoy winter sports in one of Europe’s top ski resorts, a great base for summer holidays and a guaranteed source of rental income.”

Located close to the residence are ski lifts giving direct access to the 300 km of slopes within the Espace Killy skiing area. One of the best-known and, at an altitude of 2,100 metres one of the highest resorts in the French Alps – making it also one of the most snow-sure – Tignes is used by the national ski team of France to train for international competitions.

Within a 15 minute walk of Le Telemark is an 18-hole golf course around the Chevril Lake which has a sailing centre nearby.

Among early buyers of apartments at Le Telemark are Duncan and Catherine Harriss of Southwell in Nottinghamshire who have reserved off-plan a two-bedroom property.

The price they paid – €257,600 – excludes VAT at 19.6 per cent and includes a further reduction in lieu of rental income during the 11-year term of their lease agreement.

Chambery Airport is less than two hours away from Tignes by car. The airports at Lyon and Grenoble are two-and-a-half hours by road.

Properties at Le Telemark are available for leaseback purchase only. Prices range from €232,000 for a one-bedroom apartment to €795,000 for a four-bedroom duplex home. They exclude VAT waived under the leaseback scheme.

Property Expo fetches enthusiastic visitors

DASKA - A great rush of the visitors from all walks of life showed enthusiasm in property exhibition namely “Property Expo-2008” mutually organised by the Daily Nawa-i-Waqt and daily The Nation in active collaboration with OTBS at a local hotel in Sialkot here.

A large number of the properties-dealing companies from Dubai, Malaysia, Gwadar, Islamabad, Karachi, Lahore and other cities established their attractive stalls in this exhibition.

President Sialkot Chamber of Commerce and Industry (SCCI) Dr. Khurram Anwar Khawaja and Sialkot DCO Capt (Rtd) Atta Muhammad Khan jointly inaugurated this exhibition. Sialkot DPO Capt (Rtd) Muhammad Ameen, provincial additional general secretary PML-N Punjab Mansha Ullah Butt, Chief Manager State Bank of Pakistan (SBP) Sialkot Saeed Hassan, senior member Sialkot District Peace Committee Zafar Malik, Chairperson Benazir Bhutto Shaheed Women Centre Sialkot Dr. Naseem Shakeel, senior journalists Hamid Ali Khan, Zahid Ali Khan, Humayoun Iqbal Malik, Abid Hussain Mehdi, exporters, industrialists, traders, leading property dealers and their families visited this exhibition and they showed keen interest in buying and selling in Pakistan and abroad. The visitors were of the views that such exhibitions were vital to open the new vistas of real estate business opportunities in Pakistan and abroad as well.

Construction Firms Feel The Heat Of Real Estate Slowdown

From prefabricated walls to pipework and fittings, Gulf construction companies are putting plans on hold and see tough times ahead in Dubai, as developers review and slow projects due to the global credit crisis. The once-booming real estate sector of the emirate is feeling the pain as projects are scaled back, property prices fall, and jobs are cut. Gulf Wall, a firm that supplies precast walling and partition systems, has put a Dubai hotel and resort project on hold, its director Toby Cooke said at the Big 5 exhibition on Sunday. Controlling supply is what they [the government] will do and what they are doing. They have a committee ... it's sensible," he said referring to the committee set up by Dubai earlier this month to recommend ways to tackle the impact of the global financial crisis on the economy, including real estate and banks.

Trading and engineering firm German-Gulf Enterprises is expecting a fall in sales of up to 50 per cent for concrete pumps and batching plants next year as orders from concrete companies are expected to fall. People on the verge of taking deliveries are postponing because of the credit crisis, maybe because business on their side is lower," Paresh Ashar, a manager at the firm said. Andreas Pennekamp, head of marketing building technology at Rehau, a firm that specialises in polymer manufacturing, said while the firm's sales had not yet been affected, the number of customers looking for cheaper pipes had risen. Sama Dubai, the international real estate arm of Dubai Holding, said last week it was reviewing its project pipeline and considering job cuts. Nakheel said it was witnessing a slowdown in the rate of real estate sales and last month announced it had scaled back dredging work on Palm Deira. Two or three years ago this exhibition was really busy," said the firm's sales and marketing manager, Jalal Nofal. "This year it is half full.

Pakistan Real estate boom

People liquidating bank savings to invest in property; FPCCI body on housing and construction SVP Munir Sultan says rates to remain stable and hike after March; realtors say investors fearing financial meltdown in UAE coming back home. Local builders in Pakistan are having a field day as the newly introduced projects all over Pakistan have received tremendous positive response marking the first signs of real estate sector revival in the country.

Real estate agents and builders said that though prices continue to remain low owing to recession - the demand for properties is increasing as investors are coming back home after trying their luck in UAE.

Senior Vice President of FPCCI Sub committee on Housing and Construction, Munir Sultan predicted that the prices of properties would remain stable for the time being and would only hike after March.

Estate agents and experts informed that the buyers of these properties are investors having money stashed in local and foreign banks and following the global credit crunch feared for their savings.

Sultan explained: "These are ordinary well to-do people of our society who liquidated their bank savings and opted for safe heaven investment in real estate. Properties are sound investments as no one can steal them from you and more importantly because regardless of the political or economical conditions, land assets do eventually gain value with time."

He further said that Pakistan urgently needs to work on its investors’ confidence and the government should take steps to clear the country of its black economy that is working parallel to the legal system.

He advised the government to introduce a law similar to UAE’s Escrow account concept, which provides investor’s peace of mind over their investments and helps reduce fraud cases.

However, Sultan went on to inform that DHA Lahore, Islamabad and Karachi would not witness any changes both in terms of revival and price fluctuations as "the demands in these areas were artificially created particularly by stock exchange investors".

"These investors purchased plots in great numbers and artificially pushed up the prices and therefore they are not accounted for in the overall country’s real estate movements. DHA properties investment rules are also quite different from the rest of the country," he continued.

In Karachi, residential projects with ground floor commercial shops in scheme 33, near Super Highway are the most well received ones according to most estate agents in the localities of PECHS, Gulistan e Jauhar and Gulshan e Iqbal.

Abu Masood Khan of Khan Estate Agency and Ashok of Ashok Builders informed of similar results in Hyderabad. They said that there has been a hike in residential projects and shopping complexes in their city.

"The idea of commercial projects has especially gained momentum and there are increasing number of shopping plazas that have been introduced" Ashok said. Latifabad, Heerabad, Saddar and the area around Isra University have witnessed the maximum projects, Khan shared.

Similarly, Basit Mahmood, a project director of Globiz in Lahore informed that his city is also experiencing a revived interest in empty plots and constructed projects and real estate related advertisements have popped up across the city’s billboard, cable televisions and newspapers.

Meanwhile, an expert dealing with Gwadar expressed that the place continues to remain in doldrums and so far no changes have been witnessed there.

"Let us hope the investment fever that is spreading in the other parts of the country also reaches here to save us from disaster too" he added.

Foreign investors to continue investment

In spite of constant security threats in the country, 76 per cent of Overseas Investors Chamber of Commerce and Industry (OICCI) members have said that they would continue with the investment plans for the next two years, though 63 per cent foreign investors said that their expansion plans would be limited. However, 88 per cent of the 110 members who replied to the OICCI Perception Survey 2008 stated that the government’s efforts to control the law and order situation were not effective enough.

The perception survey was conducted by the OICCI between August and September 2008 and its report was formally launched on Wednesday at the chamber’s head office by its President Waqar A Malik.

Pakistan’s overall system of corporate governance was viewed as effective by 79 per cent of the respondents. With reference to the Federal Budget 2008-09, investors had mixed sentiments regarding its impact on business activities.

While half the respondents viewed it in positive light, the other half was not so optimistic and considered it a further drain on foreign investments. This stands as a sharp contrast to the previous year when 63 per cent of the investors saw the budget for 2007-08 in favorable terms.

In respect to the different ministries, the Ministry of Commerce, Communication, Finance, Economic Affairs and Foreign Affairs were termed to be the best performing bodies with 70 per cent of the OICCI members approving of their performance.

In contrast, the Ministries of Health, Water and Power and Law and Justice were the most unpopular with more than 60 per cent of the respondents deeming their performance as below average.

Moreover, with the exception of WAPDA, and Intellectual Property Organisation of Pakistan whose functions were termed unfavorable by at least 70 per cent members, all other bodies were considered satisfactory in terms of performance.

Financial institutions and bodies such as State Bank of Pakistan (SBP) with 58 per cent and Securities and Exchange Commission of Pakistan (SECP) with 62 per cent acceptance fared amongst the best institutions, whereas Federal Board of Revenue (FBR) and the Pakistan Telecommunications Authority (PTA) were also strongly appreciated.

However, even though 50 per cent respondents found Pakistan’s business environment to be better than other emerging markets around the world, the pharmaceutical and financial sectors preferred other emerging markets to this country.

Other than the pharmaceutical sector, the oil and gas sector also preferred other countries in the region of South Asia to Pakistan and this was mainly due to the circular debt issue that the country is currently facing.

On the other hand, an astounding 96 per cent of the OICCI members termed the internal law and order situation of Pakistan as the most pressing concern for foreign investors and a major impediment to Foreign Direct Investments (FDI) into the country.

Breaking down the ratio, out of 110 respondents, 101 termed the internal political situation as poor, 7 acceptable and only one member termed it good compared to last year’s statistics of 69 members terming it poor and the rest acceptable. The law and order situation was also termed poor by 106 members, whereas only 4 members deemed it acceptable with none ranking it good this year.

Meanwhile, 77 per cent of the OICCI members were strongly concerned about the implementation of policies in Pakistan, of which 18 foreign investors said that they may wind up their operations if the law and order situation persists in the country.

Worst still, 90 per cent of the respondents termed the rupee-dollar parity as a major impediment negatively affecting local businesses, whereas 72 per cent of the OICCI members expressed disapproval of the way the domestic economy was progressing this year compared to 50 per cent for the last year.

Furthermore, 62 per cent of the members also found the corporate tax rate at 35 per cent to be unacceptably high, amongst which, the pharmaceutical sector was the most disapproving.

On the issue of utilities, the availability of electricity was deemed almost as non existent as 109 members marked it poor against one member’s acceptable and none ranking it good.

Some of the recommendations that the survey brought forward by foreign investors were that corporate tax rate should be made comparable to the region, whereas strengthening of the domestic economy and improvement in policy implementation was also stressed upon by the investors.

The foreign investors identified five key areas that are a challenge for the government: law and order, political uncertainty, energy deficiency, cost of operations and infrastructure.

They also advised different ways to conserve energy and generate additional power.

As 86 per cent of the OICCI members said that the government has been inefficient in its efforts to improve the perception of Pakistan amongst potential foreign investors, they advised that the government should develop more aggressive and optimistic media campaigns, address the concerns of the business community in a more concrete manner and draft a more robust investment promotion strategy and implement it.

Positive Opportunities Seen For Abu Dhabi’s Real Estate Sector

The current global economic situation offers positive opportunities for Abu Dhabi’s developers to press ahead with implementing quality, standards and transparency in property development, according to a real estate executive. Real estate has a long term investment horizon and with the current global re-pricing of risks, developers are restructuring their approach and placing stronger emphasis on the delivery aspects to its customers,” said Gurjit Singh, Chief Property Development Officer at Sorouh Real Estate PJSC. Delivering a speech during the Working Buildings Middle East conference at the Abu Dhabi National Exhibition Centre, Singh emphasised that developers should focus their efforts in two areas: on coupling both existing customers and potential end user occupiers with liquidity.

In Abu Dhabi, we are particularly fortunate to have some strong fundamentals underpinning the real estate sector. These fundamentals of continued population growth, and planned development strategy based on the Abu Dhabi 2030 Plan coupled with a real estate supply lag provides ample opportunity to fill the end user occupier demand gap. The last mile now needs the urgent unlocking of liquidity in the financial system to the real estate sector,” according to a Press release. He noted that it was opportune moment for developers to press ahead with projects, which will bring new residential units to the market over the next two to three years for end user occupiers. There is clear demand for them in spite of the global situation. Singh said Sorouh was pressing ahead on all its projects to ensure continued contribution to Abu Dhabi’s planned development over the next few years. “We’re seeing some positive opportunities from the current global situation and its impact on the real estate market, to improve the delivery system’s quality, standard and transparency through sustainable place making and place management, the building blocks of which are already encapsulated in the Abu Dhabi 2030 Framework Plan,” he disclosed.

Dubai Launches Online Registration Of Properties

Dubai Government has launched an online property registration scheme, Oqood, that analysts say, will lead to a higher level of transparency and eventually create an online property price index (PPI). Dubai's Land Department in conjunction with the Real Estate Regulatory Authority (Rera), yesterday said, the new online application 'Oqood' will enable the effective implementation of Law No. 13 of 2008 for regulating the interim real estate register in Dubai, a statement said. Mohammad Sultan Thani, assistant director-general for Excellence and Organisation Governance at the Dubai Land Department, said: "Interim registration is essential for the real estate market, and is considered a unique and pioneering step covering even off-plan sales transactions. The law protects the interest of all parties through closely monitoring sales transactions. The launch of the online application will significantly facilitate the entire process.

The online registration process will lead to minimising conflicts arising between developers, investors and sellers, while contributing to cutting down the escalating off-plan selling and reselling costs, the statement said. This is an excellent step and comes at the right time. The move will provide utmost clarity and transparency in real estate market on data, which will eventually lead to a detailed PPI," Sudhir Kumar, managing director of Realtors' International, a property consultancy. Charges will be the same as levied by the Dubai Land Department - one per cent of the total value paid by the seller and one per cent to be paid by the consumer. Ahmad Al Qaizi, chief executive of Emirates Real Estate Solutions, said: "The launch of online application Oqood will help ensure the availability of detailed data on private proprietorship of all real estate that have been sold off-plan in Dubai. It will also protect customers' rights through safe-guarding the development against any manipulation. It will safeguard the interests of investors, developers and end-users, as well as for the government. The move also reflects lots of seriousness from the government in raising transparency. The database or PPI will help investors and end-users to determine price in a very transparent way.More than 80,000 units have already been registered with Oqood so far.

A new scheme of the Defence Housing Authority (DHA) will start astride the Super Highway in 2009.

The annual meeting of the Governing Body of DHA Karachi, which was held here on Saturday to review the development projects and other policy matters of DHA at macro level. Secretary Defence, Lt Gen (Retd) Syed Athar Ali who is also Chairman Governing Body presided the meeting, says a press release. The Board was informed that the process of survey and demarcation of land acquired by DHA astride Super Highway from Sindh government has gained momentum after vacation of stay by the High Court.

The master planning of the new DHA-II being developed as a model satellite town would start in early next year and the first balloting for allotment of land to the allotees has been scheduled tentatively in November next year. Secretary Defence directed the DHA to address the grey areas of security, garbage collection and cleanliness in Defence with a reinvigorated approach. He asked the DHA to take pragmatic measures to ensure that the stalled waterfront projects take off quickly thus giving impetus to the economic activity in the country. The Governing Body (GB) was informed that DHA spent an amount of Rs2.2 billion last year on laying a new storm water drainage system in developed phases of DHA on war footing. The GB directed the DHA to complete the rehabilitation of roads damaged due to drainage works in the area on top priority.

Administrator DHA informed the meeting that the work of reconstruction of damaged roads would be completed under a phased programme on a fast track basis in this fiscal year. The GB was intimated that the DHA’s Power and Desalination plant is closed for the last one month due to a major technical fault in the central shaft of gas turbine. The damaged shaft is being replaced by Siemens Germany and the plant would resume its operation by the first week of December this year.

The Governing Body also approved DHA’s annual budget for the fiscal year 2008-2009. A record sum of approximately nine billion rupees has been earmarked in the budget for various development projects this year.

The meeting was informed that infrastructural development of DHA Phase-VIII was underway based on the revised Master Plan. The GB directed DHA to adopt a renewed strategy with a view to expedite development of maximum areas which could be opened for construction activity at the earliest. The Governing Body was informed that 12 blocks of Creek Vistas apartments, the biggest high rise complex of the country located in Ph-VIII would be handed over to the allotees according to a scheduled programme between the end of December 2008 to May 2009.

Earlier Administrator DHA, Brig. Khalid Tirmizi presented the progress report and reiterated that Housing Authority is taking proactive measures to improve civic amenities and the work culture in DHA.

Emaar Offers Flexible Payment Plan For Buyers

Emaar Properties yesterday said it has unveiled a flexible payment scheme aimed at making it easier for customers to purchase property in Dubai, as sales across Dubai's real estate has come to a near halt. With the innovative 'To Own' scheme, Emaar is initially rolling out two programmes - 'Plan to Own' and 'Rent to Own,' both of which will enable customers to own property under more affordable terms within Emaar's world-class master-planned communities in Dubai," the company said in a statement. The scheme reflects Emaar's commitment to extend further support to customers and be a stronger facilitator of property purchases. Domestic demand for real estate continues to outstrip supply in Dubai. Emaar's new programmes build further on the real demand for property, which has now positively shifted towards an end-user market.

The Plan to Own" programme will offer the flexibility of paying 25 per cent of the property price after the handover and over five years, making it possible to bridge the current gap due to lower loan to value ratios offered by banks and financial institutions. As per the "Plan to Own" programme, Emaar will help potential home-owners and commercial customers who can qualify for a mortgage through a bank to bridge the gap by extending their payment plans. Emaar's extended payment plan of up to 25 per cent of the property value will be paid back by the customer in single annual installments for five years, after moving into their new homes. The first payment will begin only one year after receiving their property. With the "Rent to Own" programme, tenants can adjust 100 per cent of the first year's rents as home finance if they decide to purchase the property within ten months of living in the home. It gives them the unique opportunity to rent, move in, assess the quality of the property and make an informed property purchase decision. The property price will remain fixed for a period of one year, and customers will have the option of acquiring the "Plan to Own" programme if they decide to buy. During the rent period, tenants will have the first right to buy the property.

Emaar Launches New Payment Scheme

Economic downturn takes toll on property rates

Real estate rates are under pressure, as entrepreneurs are trying to offload their assets to remain afloat or convert the assets into dollars.

The News has found that almost all industrial sectors are incurring losses, as they are unable to recover their cost due to high interest rates, inflation and plunging sales. These factors have made it impossible for industries to service their loans.

It has been found that most industries first tried to slash their inventories by selling them at discounted rates to overcome cash crunch and pay loan instalments.

After exhausting this option, some of the manufacturers preferred to delay payment of bank dues while some disposed of their property to repay their bank loans on time.

It has been found that the industries that have been regularly rescheduling their loans in the past preferred to delay bank payments as their asset values were less than their loan amount. They know that banks would ultimately approach them for rescheduling loans again instead of going into litigation.

However most of those manufacturers that have never defaulted in the past nor they availed any rescheduling opportunity preferred to dispose off their property and pay banks on time.

They have a reason to do so. They have built up assets by remaining update on their loans. They run the most efficient industries in their sector that has saved them from minor economic downturns in the past.

The current economic decline is beyond their capability as the cost of production has risen taking the costs beyond the reach of the consumers. The rates of real estate have declined by 30-40 per cent during last 10 months as large numbers of entrepreneurs are offering their high valued property for sale. The decline in rupee value during past two months has accelerated this process.

The pressure on property further intensified as businessmen saw huge risk to their capital because of massive devaluation of rupee. They are also disposing of their assets in rush. They are transferring capital abroad to save themselves from the decline in their asset value. The Advisor to the Prime Minister on Finance has admitted that billions of dollars have been transferred abroad in recent months.

It was found that stock market players also had bought big properties from the wealth they accumulated during the good days in the stock market. Some of them had already cashed the assets and parked money in dollar accounts while many are contemplating disposing their properties to settle their accounts with the bourses when the lower floor cap on the market is removed.

After shock in capital market they do not consider property as a safe avenue. Most want to get rid of the property and convert it in to foreign currency.

It was found that property rates have declined more sharply in the posh localities where most of the industrialist elite and capital market investors had accumulated large properties. The decline in middle class housing schemes is half decline witnessed in posh residential colonies.

CDA ‘to generate Rs3b from auction of plots’

The Capital Development Authority (CDA) is set to generate around Rs3 billion from the auction of 46 residential, commercial, industrial and orchard farm plots in the upcoming auction to be held on November 24-25.

CDA Chairman Tariq Mehmood said that the civic body was busy in making arrangements to overcome the financial constraints it is confronted with at present because of heavy budget announced last June and heavy expenditures already made on the development projects, mainly on the road projects.

“The CDA is generating only Rs1.30 billion through its own resources, that is revenue collection on account of property tax, the water charges and some contributions coming in shape of the money received through advertisement charges,” the chairman said.

He said that a heavy budget of Rs26 billion was announced earlier this year while a number of mega projects were launched and a few were completed over the last five years as well. “At present there are only Rs8 billion left in the kitty of the CDA, he added.

Meanwhile, Director Estate Management-I Syed Iftikhar Hussain Shah said that 46 plots, including residential, commercial, industrial and orchard farm, would be put up for open auction to be held on November 24-25 at the Aabpara Community Centre.

“Two plots measuring 555 sq yards and two measuring 600 sq yard are located in Sector F-10/2, one plot measuring 1,000 sq yard is located in Sector F-11/4, four plots measuring 400 sq yard each are located in Sector F-11/4, 12 plots measuring 355 sq yard each are located in Sector G-10/3, and six plots measuring 166 sq yard each are located in Sector I-10/2,” Syed Iftikhar Hussain Shah told ‘The News’.

On the commercial side two plots measuring 1,770 sq yard will be up for grabs in Markaz G-11 while one plot measuring 1,066 sq yards will be auctioned in Markaz I-8. One huge plot measuring 4,363 sq yard will be up for auction in Sector I-11/4. A small plot for a shop measuring 26 sq yard will also be available in Sector I-11/4.

Six plots have been created in I&T Centre, G-10, four are measuring 533 square yards, one measures 524 square yards and one measures 355 square yards.

The six orchard scheme farms are located along Murree Road. Five measure two-and-a-half acres while one measures 4.04 acres.