Islamabad, Sep 12: House Building Finance Corporation (HBFC), the real estate market maintained a mixed trend as the commercial capital saw moderate growth in values, but major cities like Islamabad, Rawalpindi, and Lahore recorded a downward trend due to the slowdown in economic activities and the imposition of new taxes on properties.
Small Properties (3 Marla to 7 Marla or 75 Square Yards to 175 Square Yards), Medium Properties (10 Marla to 15 Marla or 250 Square Yards to 375 Square Yards), and Large Properties (1 Kanal to 2 Kanal or 1000 Square Yard to 2000 Square Yard) are the three categories into which the properties have been separated. Additionally, the locations and cities of the properties affect the cost.
The real estate market’s tendencies from 2012 to 2023 were emphasized in the paper. Karachi Real Estate In Karachi, the percentage of small properties increased rapidly between 2012 and 2014, reaching a peak of 50% in that year. Following a brief dip in 2016, the market experienced moderate but consistent growth. It then saw a rebound in 2021–2022, with growth rates of 4% and 4%, respectively, and an acceleration to 18% growth in 2024.
The trend of medium-sized properties has been more erratic, with contractions in 2020 and 2016 before a recent rebound resulted in a 24 percent gain in 2024.Large properties in Karachi performed inconsistently, with phases of rapid expansion and contraction. Growth peaked in 2014 at 69 percent, with steady growth of 11 percent in 2012.
Lahore’s Real Estate Market The Lahore real estate market performed differently in each of its sectors between 2012 and 2024. The rise of small properties was highly volatile; it peaked in 2014 at 81 percent, continued to expand by double digits in subsequent years, and ended at 12 percent in 2024.
The rise of medium-sized properties was more steady, reaching major peaks of 61 percent in 2012 and 28 percent in 2016, before leveling off at 13 percent in 2024. Big properties saw sharp swings, with surprise drops of 7% in 2024 following highs of 28% between 2014 and 2022.
This divergent performance in 2024 a decline in large properties coupled with sustained growth in the small and medium-sized segments suggests a change in the dynamics of Lahore’s real estate market.
Between 2012 and 2016, the Islamabad small-property market had fluctuations, with notable increases in 2013 (12%) and 2015 (22%). The market did, however, see a significant decline in growth in 2017 and 2018. This was followed by a robust recovery in 2021, growing by 19%, 28% in 2023, and 8% in 2024. The medium-sized real estate market in Islamabad saw substantial fluctuations between 2012 and 2024, beginning with a 44 percent growth, dropping to 0 percent in 2018 and 2019, and then rising again.
The market showed cyclical patterns, peaking once more at a growth rate of 26% in 2023 before decreasing to 1% in 2024. Islamabad’s large properties have seen varying degrees of success, with notable swings, such as an astounding 81 percent growth in 2016.
After that, there was a more gradual expansion between 2 and 11 percent per year from 2014 to 2019. A moderate 5% growth in 2024 suggested steady demand. The growth trajectory of medium-sized properties in Rawalpindi has been modest and consistent, gaining traction in 2014 with a 74 percent increase.
There has been steady growth in the last few years, with increases of 31% in 2022 and 2023 and 11% in 2024, indicating that there is a growing need for medium-sized homes. The large-scale real estate market in Rawalpindi was extremely volatile between 2012 and 2024. Following a slow 10 percent rise in 2012, it experienced a sharp increase to 111 percent in 2013 and then 24 percent in 2014.
After that, the market cooled, experiencing a modest decline and stalling between 2016 and 2018. 2020 saw the start of a robust recovery with growth of 37%, which continued through 2023. But 2024 witnessed a dramatic reverse with a 16 percent decrease, underscoring the unpredictability of the market. Presently, the current economic difficulties have also had a significant influence on Pakistan’s real estate industry. The recent economic issues have also had a significant impact on Pakistan’s real estate sector.
High rates of inflation, which in FY24 averaged over 24 percent, have reduced people’s spending power and have a negative impact on demand, especially for mid- to high-end real estate. Historically, international investors and Pakistanis living abroad have found real estate to be an increasingly alluring alternative due to currency devaluation, with the Pakistani Rupee declining in value relative to other major currencies.
Moreover, the State Bank of Pakistan’s policy rate increase to 22 percent in 2023 despite increasing inflation has made mortgages more expensive, potentially slowing down market activity. Economic uncertainty has also led to cautious investor attitude, with many adopting a ‘wait-and-see’ strategy before making large investments.
