Karachi Real Estate – Why it remained deteriorated in 2011

Whenever Pakistan real estate is under discussion, the performance of Karachi, Lahore and Islamabad real estate is discussed primarily. In the beginning of 2011, you might have heard the news stating, “Just like 2010, the year 2011 will also remain a challenging year for Pakistan real estate.” This is because the performance of this sector remained under the standard bar throughout the four quarters of 2011. Out of all the three main real estate sub sectors of Pakistan, Karachi real estate remained the most deteriorated one during 2011 and contributed considerably to the overall low performance.rnDespite the fact, that due to being the largest city with seaports, Karachi is the business hub of Pakistan, its residents continue to migration to other cities. The biggest reason behind all of this is the violence and blood shed in the city. The cases of robberies, kidnappings, extortion, and target killing stayed at alarming high rate throughout the year. Even the once best performing and highly peaceful areas of Karachi, like DHA, are not safe anymore. Many vehicle snatching and other robbery incidents in DHA occurred due to the carelessness of DHA’s security plan.rnThis weak law and order situation motivated the people of troubled areas to sell their property and assets in Karachi and move their investments to other peaceful cities. Even the people who afforded to buy a decent house in Karachi preferred, shifting to other cities just because they could no longer live in “no man’s land”. Residents of Karachi mainly shifted to Lahore as they always find Lahore offering the same trendy lifestyle as Karachi’s along with better law and order condition. rnThe migrants of Karachi preferred to live in the posh areas of Lahore including Bahria Town and DHA. As the property price in the mentioned areas of Lahore is extremely high, those who could afford to purchase their own houses did so while those who couldn’t chose to live on rents in the same areas. These migrants also moved their businesses to Lahore, which increased the chances of Lahore emerging as the financial capital of Pakistan. This migration raised the Lahore’s real estate values by 30% and the demand of Karachi real estate plummeted. rnMoreover, the non-transparency of the Karachi property market also added to its deteriorating condition. The worst reported cases of Land mafia were noticed in Karachi at large. Besides that, the fraudulent and fictitious allotments, doubtful land recording, non-transparency in registration process and duplicate and multiple claims on the properties and many other such encumbrances kept Karachi real estate under pressure. To control violence and prevent people from migration, indiscriminate and ruthless action should be taken by the Federal Government. Some stern actions along with better implementation of law would automatically fix the deteriorating condition of Karachi real estate. People are desperately waiting for elections so that the new government does what is best for Karachi.