Karachi: Housing projects lose their charm

* Slump in launch of new projects attributed to prevailing political uncertainty
* Builders and developers fear slow response

By Moonis Ahmed

KARACHI: There has been a significant reduction in the launch of new housing projects at a time that is considered to be peak season for this activity owing to the prevailing uncertainty in the country, builders and developers told Daily Times.

They said the persistent political insecurity in the country has not allowed local and foreign investor-confidence to grow; and spoiled business plans of local builders and developers, who were looking forward to launch their housing projects.

It has been witnessed in the last four to five years that around 30-40 various housing projects including plots, apartments, town houses and bungalows are launched in the month of Ramazan, but these numbers have almost come down to nil this year.

Karachi Chamber of Commerce and Industry (KCCI) Standing Committee on Real Estate and Construction Chairman Munir Sultan said the real estate sector has suffered adverse effects, as the government’s non-development policies for builders and developers are not helping their cause. He said the real estate sector in Pakistan is in dire straits as investments worth almost $3 billion have been transferred to regional countries within a short period of just six-eight months.

He said that the launch of a large number of housing and commercial projects was planned on the occasion of Eidul Fitr, but owing to the current political conditions, builders and developers fear dull response this year. As many as 3,000 builders have moved to Dubai and other regional countries, as housing and construction sector is thriving in these places, he added.

Munir said a number of housing and commercial projects would be launched after the atmosphere of political uncertainty is brought to an end and normalcy returns back to the country. Besides, the government has launched only five low-cost housing projects in 18 months in the city, he added.

The booming construction and cross-country trade was attracting investors and traders in Dubai for more than a decade. However, the deepening political crisis in Pakistan since November 2007 and the economic meltdown have accelerated the pace of migration of capital and flow of investment to this desert island.

Former chairman of the Association of Builders and Developers (ABAD) Hafeez Butt said that bookings in various housing projects have sharply decreased by 70 percent in the current season throughout the country, particularly in Karachi.

“Projects that are being marketed are rare and ones whose construction had started earlier, while new projects are not being launched in the country,” he said.

“Investors are reluctant to capitalise their money in real estate keeping in view the prevailing political scenario in the country, whereas the genuine buyers are also disinterested in buying property,” Butt said.

He said besides foreign investors, even the local immigrants, who migrate from various cities to Karachi, were not active in purchasing property since they preferred to stay on rent.

Businessmen in Karachi say as many as 3,000 Pakistani investors in construction, commodity trading, shares and exchange business are making good money in Dubai.
Source: Daily Times, 20/9/2008