Notice : MRA (Monthly Real Estate Analysis) – December 2016 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 however attend our real estate briefing and discussion sessions held every Friday 7 to 8 Pm to answer your queries in person .
The big news this month was Tax amnesty scheme, we have already discussed the effects of Tax amnesty on property in detail earlier.
Our discussion forum is always open for real estate related questions and answers.
In this months market report our focus has been on commercial investments specially in DHA Lahore Phase 8 Broadway and Phase 6.
The real estate market took another stumble because of the selling pressure which seems to increase with every passing day now in November. You can clearly see the decrease in prices in our Price trend graph of DHA Lahore. The bigger they are the harder they fall, all areas with investment bubbles are under heavy selling pressure. The image below reflects the market psychology to sell things in fear. Two wrongs do not make a right or do they?
We suggest that you should only sell under these 3 possible scenarios.
Phase 1 to 5 are mostly stable unless you are a desperate seller who is ready to give some leverage to the buyers who are trying to take advantage of the fear factor in the market.
Pentasquare and M block extension news.
a. Buy commercial for rental purpose.
b. We do not recommend buying in M block.
c. We do recommend that if you have a plot for investment in Phase 5, sell it and buy some thing in DHA Phase 8 proper.
Phase 6 prices are stable as expected, there is a renewed selling pressure in Phase 6 by the end of November and yes we can now notice another minor correction in prices.
The inflated MB commercials are suffering though and may take another dip downwards.
Similarly the newly launched A block commercials are highly over priced and have been ever since they were launched. We do agree that they have an awesome location but it will take a very long time to develop them and have a market established there.
a. Balloting of CCA 2
a. Buy residential plots in DHA Lahore phase 6 if available at a lower price than the market. That will pay you off in a few months.
b. Good opportunity to buy commercial on Main MB at 5 to 10 Million less.
A lot happened in Phase 7, the commercial files continued to rise and trend safely above 250 Lacs this month. We do believe that Phase 7 will continue to offer smart investments. However we prefer the 9 Town 4 Marla commercial instead of Phase 7 file at these prices.
a. If commercial files take another dip back to 220 to 210 Lacs buy it.
Same as last month
a. If you have limited budget buy a plot in Phase 7 to make a house.
b. Buying 4 Marla commercials files in DHA Phase 7 on dips towards 220 to 210 Lacs is a good strategy for short term trade.
We are now seeing a correction in all inflated and higher budget plots specially in T, U & W blocks. When it comes to DHA Phase 8 we still believe that some areas will dip further, where as some areas will easily sustain the correction phase. The development work is being done speedily and now we can see light poles in V and X Block as well. If you wish to invest in Phase 8 than these are perfect times to do so.
Commercials in Phase 8 broadway are a good investment over all. However some areas with highly inflated prices are not suitable for investment. Even if they wont go down, they are not expected to give you any higher return on your investment in near future. We are also expecting a correction in some inflated areas such as C block, Main facing commercials and we believe that the underdogs “the lower priced plots” have a bigger potential for investment now. Logically if i buy a commercial in 16 crores it will cost me nearly 20 crores after i construct a plaza on Broadway commercial, with no possible rental income in near future, i will prefer to buy in CCA Phase 6 and 5 where i can start getting a rental income straight away in almost the same price. Genuine market assessment of the 8 marla Broadway commercials are as under
Facing Main Broadway – 12 to 14 crores max
Facing parking or immediate back – 750 to 9 Crores
Further behind – 550 Lacs to 650 Lacs
If the commercial plots in Broadway reach these prices we will suggest that you buy them.
The 8 Marla commercial files in Broadway in my opinion are highly inflated at 600 Lacs and should be only bought any where between 500 to 525 Lacs for a good trade.
CCA 1 and CCA 2 are again highly inflated in our opinion as of now and are very strong contenders for a major correction.
Z (Ivy green) is pretty stable so far with a minor correction but we will be very careful to invest in it.
a. Rumors or solid news of DHA Phase 8 proper possession may stabilize Phase 8.
a. We strongly recommend to buy residential plots on dips for investment or if you wish to make your own house. or buy 10 and 5 Marla plots in Y and Z block on dips.
b. Do not buy commercial plots in Z Block as of now, we believe there is more room for correction.
c. We will only recommend you to buy 4 Marla commercial between 300 to 450 Lacs and 8 Marla between 600 to 800 Lacs in good areas
Residential plot in 9 Town are stable now. However the commercial files are trading well at 280 to 290 Lacs. Any thing above that is a bubble in our opinion and should be avoided. It is safe to buy these files at these prices for long term, however if you are a short term trader we will wait for a Dip and if we wont get any, than it does not matter there are other places to invest your money.
However in genuine terms we are not very fond of 9 town 4 Marla files because of its location and the number of plots. A genuine assessment of the price is 260 to 270 Lacs only before balloting.
a. Balloting news about 9 Town commercial may push the prices up towards 325 to 350 Lacs .
a. Surely a buy for mid term trade and enjoy a million or more in one year on just an investment of 5.5 Million.
b. We did give a strong buy signal for the 9 Town files at 250 to 260 Lacs and we still believe that this is a safe price zone. However unless there is another availability of files in 9 Town we do not see it going rock bottom again. Buying at 275 TO 300 Lacs puts you at a risk of 2 million downside in comparison to 7 million upside so it is still a buy signal for us at any where between 250 to 300 Lacs.
A steady decline is expected in Phase 9 prism. I will not suggest that you should trade in 9 prism on news such as construction of southern loop of ring road etc. We will wait for a real news and the only real news for Phase 9 is how quickly it will be developed by DHA. Lets just wait and see, even if you buy now, do not expect some huge returns in near future. We will therefore put our money in some area which has more potential in near future such as DHA Phase 8.
a. We will not invest in Phase 9 Prism under these circumstances and wait till we get a clear bottom price.
a. Sell residential and Sell Commercial plots.
B. We only recommend buying a plot for long term investment in 75 to 80 Lacs any where in 9 prism.
The commercial files are moving higher again and we will be careful to buy them unless for a long term investment.
a. Balloting news may push the prices higher but seems unlikely that we will hear any such news this month.
a. We do not recommend buying 4 Marla commercial files in Rahber at 200 Lacs and above for short term trading.
b. The residential file is trading at 29 Lacs which is again not a very attractive price for investment.
USE OUR DISCUSSION FORUM AS WE CAN ANSWER IN DETAIL AND OTHER PEOPLE CAN ALSO POST THERE OPINION FOR A FRUITFUL DISCUSSION.
Captain (Retd) Shahnawaz Yaqub Bhatti
Investment Consultant and CEO at Imlaak
Mob : +92 333 1717170 ( Whatsapp)
Skype : Shahnawaz.yaqub
