The year 2014 proved to be a promising one of the real estate market; demand for property increased, as did the value. Here are some of the trends that the Pakistani real estate market witnessed in 2014: *Built-up property. The value of built-up commercial and residential property increased by 10 to 20% across Pakistan, while rentals increased by nearly 15%. The demand for rented residential and commercial property increased by nearly 20 and 12% respectively.
* Vacant Plots. The demand for vacant residential and commercial plots increased by nearly 25 and 40% respectively. The prices increased by 25 to 40% and are expected to increase by a further 25 to 35% in 2015. *Gated residential communities. Due to the prevailing and order situation, the establishment of gated communities increased by five to 15% in the metropolitan cities. Due to a shortage of vacant land in these cities, the number of gated communities established on their outskirts increased by nearly 25%.
Other trends that emerged in 2014 include:
* Advance property tax (ranging between one and two percent of the total property value) was introduced; this tax has to be paid by people who own property values at three million rupees or above.
*Foreign investment by Pakistanis living aboard increased by 10 to 25%; it was primarily restricted to vacant plots in gated communities in urban centres. *Construction costs increased by 15%.
*Interest rates on home loans remained the same as last year; they range between 14.3 and 14.8%.
By Mohammad Shafi Jakvani