Real Estate Market Decline in Islamabad and Lahore: Current Trends and Insights
The real estate industries in Islamabad and Lahore have in the recent past received shocks that can be attributed to economic factors and policy shifts. This blog looks at the current status of these markets, why they have been declining, and their implications for the investor and homeowner.
Recession and Policy Effects:
The presence of a slow economy in Pakistan has effectively shifted the dynamics of the real estate business. Business activities have been slowed down and new property taxes introduced causing property prices in Islamabad and Lahore to go down. HBFC’s annual report reveals that these factors have pulled down the demand considerably, especially in large cities.
Market Segmentation and Performance
The real estate market can be divided into three main categories based on property size:
1. Small Properties (3 Marla to 7 Marla or 75 Square Yards to 175 Square Yards)
2. Medium Properties (10 Marla to 15 Marla or 250 Square Yards to 375 Square Yards)
3. Large Properties (1 Kanal to 2 Kanal or 1000 Square Yards to 2000 Square Yards)
Each segment has shown varying trends, influenced by location and economic conditions.
Islamabad’s Real Estate Market
In Islamabad, small properties have seen fluctuating trends. After a period of growth in 2021 and 2023, the market has moderated, showing only an 8% growth in 2024. Medium properties have experienced significant volatility, with growth peaking at 26% in 2023 before stabilizing at 11% in 2024. Large properties have faced the most challenges, with a notable decline of 23% in 2024, indicating significant market difficulties.
Lahore’s Real Estate Market
Lahore’s real estate market has also faced a downturn. Small properties, which once saw high growth rates, have now stabilized at a modest 12% growth in 2024. Medium properties have shown more consistent performance, with a 13% growth in 2024. However, large properties have experienced a decline, dropping by 7% in 2024. This shift suggests changing investor preferences and economic factors affecting the luxury market.
Rawalpindi’s Real Estate Market
Rawalpindi’s real estate market has shown mixed performance. Small properties experienced moderate growth from 2014 to 2019, with fluctuations between 2% and 11% annually. In 2024, a modest 5% growth indicated stable demand. Medium properties have followed a steady growth trajectory, gaining momentum in 2014 with a 74% increase. Consistent growth has been observed in recent years, with a 31% increase in both 2022 and 2023, and 11% growth in 2024, suggesting increasing demand for medium-sized homes. Large properties experienced extreme volatility from 2012 to 2024, with significant fluctuations in growth rates.
Some of the factors that have a major impact on the market are discussed below
Several key factors are influencing the real estate market in Islamabad and Lahore:Several key factors are influencing the real estate market in Islamabad and Lahore:
1. Economic Policies: Taxes and regulations have now been introduced meaning investing in property is not as lucrative as it used to be.
2. Economic Conditions: The general state of the economy has dampened purchasing power and investment abilities Equally, Debt levels have increased due to previous borrowing from both local and foreign sources.
3. Investor Sentiment: The nature of investors preferences has been changing with many of them moving towards properties in the lower price range.
Future Outlook
Therefore the prospect for the real estate market of Islamabad and Lahore will hinge on several factors such as: economic revivals, policies, and changes in investors sentiments. According to the current trends, investing in UK may be a little difficult but with relatively lower property prices and potential growth in the future, someone could always make a kill.
Conclusion
Currently, the real estate markets in both Islamabad and Lahore are experiencing major drawbacks because of the various economic along with the policy conditions. These trends and what they mean are described in the following section to assist investors and homeowners in devising a sound strategy.