Rebound in Karachi’s Real Estate Market: Prices on the Rise Again

The real estate sector in Karachi, particularly in the Defence area, has shown signs of revival in the past six months, following a long period of stagnation. According to industry experts, property prices are once again on the rise after years of decline, marking a potential turning point for the market.

**Background of Real Estate Challenges**
The real estate market in Pakistan faced a downturn after the introduction of new tax regulations by the Federal Board of Revenue (FBR) in 2016. These measures were implemented following pressure from the World Bank and the International Monetary Fund (IMF), aiming to formalize the sector and curb black-market transactions. As a result, land values were introduced, and it became mandatory for valuers to issue certificates, though these measures were later relaxed. The FBR continued to monitor land value rates, adjusting them annually.

**Prices Rising in Defence**
According to Maaz Liaqat, a real estate expert, the price of property in areas like Defence, which was once undervalued, has increased significantly. He noted that plots in areas such as DHA City, once valued at a fraction of their market price, are now seeing price hikes. The revival began with the movement of funds from Bahria Town back into the city, as people began reinvesting in Karachi’s local real estate.

Liaqat attributes the rise to improved stock market performance over the past six months. Investors in the stock market often reinvest their profits into property, further stimulating the market.

**Impact of Army Chief’s Meetings with Traders**
Liaqat also pointed to the positive effects of recent meetings between Karachi’s traders and the Chief of Army Staff. These meetings, which reassured business owners about investment security in Pakistan, have provided confidence to local investors. He believes that the construction sector, which drives over 70 related industries, is contributing to the gradual recovery of the real estate market. However, he warned that the high cost of materials due to fluctuations in the value of the dollar is a major hurdle.

**Property Prices Increasing by 20-40%**
Another real estate investor, Azam Miraj, pointed out that the market has been on a downturn since 2016, with only slight improvements seen in 2020. However, by November 2024, long-time investors in the sector have started returning, confident that the IMF’s conditions will not hurt the industry further. He stated that, in some areas like DHA Phase 8 and DHA City, property prices have increased by 20-40% due to renewed interest.

While the market has not fully returned to its pre-2016 state, the signs are promising, and experts believe the sector could soon recover to its former position if current trends continue.