The delay in this year’s forecast has been because of the new FBR valuation tables for the property. In Dec 2021, FBR announced new rates of FBR which were 100 to 300% more than the existing prices and therefore disrupted the entire real estate market. However, after successful negotiations, the prices are under revision and are expected to be revised by 1st March 2022.
I wanted to publish this year’s real estate forecast after the FBR revised its land valuation rates. However, because of further delay by FBR to publish these land valuation tables till 1st March, we will publish our annual report as per our expectations of the land valuation tables, which will release later in March.
After 1st March 2022, we will publish a supplementary forecast after new land valuation tables are published by FBR.
Summary Round-Up of 2021
2021, has been a high year for the real estate market. The property sector gained another 50 to 100% continuing the uptrend setup in 2020. We saw the most gains in the plot and files sector, and one of the biggest surprises was DHA Quetta. The prices soared from just 30 lacs to above 90 lacs and have established a range between 60 to 90 lacs. DHA Multan, Sixty6 Gulberg, and Goldcrest remained our focus in 2021 and we made some great gains. In 2021, plots performed better than construction projects in the first half whereas in the second half, we saw construction projects leading from the front, with both Sixty6 Gulberg and Goldcrest gaining 30%.
Pakistan’s real estate has always been a beneficiary of global crises. 2020 is the year we entered a new uptrend cycle in our real estate as the downtrend which started in 2016 ended. The trend continued throughout 2021. However, in Dec 2021, two major disruptive policies were announced by the Govt.
- FBR land valuation prices were revised.
- DNFBP registration became compulsory for real estate agents.
Both these policies target black money involved in the property market and have the potential of seriously disturbing the real estate market uptrend. While the Govt is presently in the process of revising these tables. An increase of 40 to 100% is expected in March 2022, followed by a further increase in the valuation tables in June 2022.
Present Market Conditions
The real estate market has been quiet since the a/m policies were announced. One of the biggest enemies of real estate is unpredictability, and this is exactly what we are going through at this moment. Smart investors are taking an exit or have already taken it.
The overall mood is quite neutral at this moment and everyone is waiting for March 2022 when the new land valuation tables will be announced.
2022 Real Estate Forecast
This is a make-or-break year for the real estate plots and file sector. A lower-than-expected land valuation by FBR will be treated as positive and the real estate sector will continue to consolidate its gain in the year 2022. However, if the prices are revised upwards in March 2022 and then later on in June 2022, which is the most expected outcome, we will see real estate coming to a standstill.
Although, as per our previous record in Pakistan, an uptrend cycle may last anywhere between 2 to 4 years. The negative impact of Govt policies may reverse the cycle even before 2 years. It is very clear that we are at the top of the expansion phase of the uptrend cycle, nearing peak and negative sentiment in the market can prove very dangerous.
However, like always, real estate will continue to grow in the ever-green market of construction and end-user market. The smart investor will prevail now who understands the dynamics of real estate and the gambler/speculative traders will play with fire.
While 2020 and 2021 were the years of plots and files, 2022 will be the year of construction projects. Especially if the FBR increases valuation tables by over 100% this year as expected, so tread carefully.
At Imlaak we only deal in select societies and bring the safest of investments with maximum growth potential, from all over Pakistan. The list of societies and projects in Pakistan which are best for investment in the year 2022 is as under:
Luxury Apartments and construction projects in Lahore
DHA Lahore residential plots
DHA Lahore commercial plots
DHA Gujranwala & ARY Laguna
DHA Multan
DHA Quetta
Gwadar
We have selected these societies based on merit, risk, and maximum profits.
Besides this, more opportunities may arise during the year 2022, so we strongly recommend that you subscribe to our blog and stay in touch to remain updated.
Apartment / Construction Projects Investment Forecast
The Government plans to fortify construction activities moving into the future and this alone is a good enough reason to change our direction as well.
The best thing I love about installment projects is the flexibility and hedge against bad markets and even USD appreciation. As you are paying slowly over years, the ROI is usually much, much better than you can get in plots. In addition, they make great rental properties if you have a bit of patience.
The projects listed below are the best available in Lahore at the moment and will offer you 15 to 20% annual returns.
Sixty6 Gulberg Luxury Serviced / Hotel Apartments
As part of our 1 crore challenge, Sixty6 Gulberg has the potential to gain 80% in capital gains in 3 years and 15 to 20% rental and capital gains combined per annum thereafter. Presently, the project is being only offered by imlaak at 30% less price than the market.
For those looking for a rental property in installments, investors can choose between short-term rental management offered by Imlaak at a discounted price or a 10% rental guarantee offered by the developer for 3 years after possession.
It may be the perfect time to grab a piece of this upcoming project on its launch in 2022 as the Government’s construction relief package and amnesty cover the project under section 111.
The construction of the project is undergoing and we expect basements to complete in April 2022.
Goldcrest Mall and Residency DHA Lahore
Goldcrest Mall and Residency is now under possession and as forecasted in our last year’s forecast, the prices have risen to 22000 per sqft plus for apartments. It is the best rental property at present in DHA Lahore, offering a 6% rental yield with a promise of at least a 20% growth in the next 2 years in capital gains.
This year we expect the Goldcrest Mall to come into full flow once the food court, cinema, and play areas open. It is especially going to be very fruitful if you invest in the commercial Mall 1st floor and food court.
Downtown Mall Liberty
Downtown Mall liberty is one of the best serviced apartment building in Gulberg Lahore offering a 10% guaranteed rental return on its apartments. In addition, the developer plans to offer hotel rooms on the 1st,2nd,3rd, and 4th floors. The project will be complete by end of 2022. If you are looking for immediate and safe rental income property, then it is your best bet.
In terms of capital gains, you can expect an increase of 20 % in a year’s time when it is nearing possession in 2022.
Indigo Boutique
We have already seen a price increase of 15% as forecasted by me in 2021. The possession is at hand and it will give great rental returns as a one-bedroom apartment that costs only 90 to 100 lacs has the potential rental yield of 6 to 8% per annum.
DHA Lahore Residential Plots Investment Forecast
This forecast is based on the assumption that FBR increases the land prices valuation by 40 to 100% in March, followed by a further increase in June. This may be enough to keep the sector under pressure in 2022 and good trading opportunities may be rare. However, if the Land Valuation is not increased, we may see increased activity, optimism, and a further jump in the prices of plots and files.
Remain tuned for trading opportunities in the residential plot sector.
DHA Lahore Phase 9 Town
9 town has made good gains in 2021 but the prices seem to be at the peak now. It is best for 5 and 10 Marla end-users for now. This makes it an ok investment in 2022, considering it is quite a mature property and may not suffer any huge blowback in case of revision of FBR valuation tables upwards.
DHA Lahore Phase 7
Phase 7 showed a lot of momentum in 2021. It is a possession phase, but an increase in FBR prices is likely to bring some correction in this phase. I see it to remain mostly stable with some chances of correction in 22.
DHA Lahore Phase 6
DHA Lahore Phase 6 has reached its peak for now and with the expectation of FBR price increase, it is less likely to continue its upward trend. It may be the best phase as of now to make a house, but for investment, there are better opportunities. I expect more growth in blocks that are less populated than the main ones such as A, B, C, etc.
DHA Lahore Phase 8
DHA Lahore Phase 8 might just suffer because of the increase in FBR valuation table. Although we may not see a major correction in 2022, we still cannot rule out the possibility of slight correction. If you are looking for a safe bet in DHA Lahore, Phase 8 and Phase 6 are still the best options. You cannot expect huge growth in Phase 8 in the coming years as the speculative traders may focus more on 9 Prism or other underdeveloped areas in the coming years. However, a detailed review is only possible after FBR valuation tables.
Given the choice between Phase 6 and Phase 8, I will definitely want to put my money on Phase 8.
DHA Lahore Phase 9 Prism
Phase 9 Prism as foretold in 2021, trading opportunities were at their peak in Phase 9 Prism because of the upcoming possession. However, the possession was only announced for Q and R blocks in February 2022. If the FBR values in this area increase in March 2022, this will be a risky phase to keep your money as the prices are already very high.
Now that DHA has announced the possession in two blocks and other blocks may get possession gradually in 2022 and 2023 as well. I believe the trading opportunities are ending and prices may stall for a couple of years.
DHA Lahore Phase 10
If you have made money in Phase 10 files in 2021, it may be a good time to thank us as we predicted it as a good opportunity in our 2021 real estate forecast.
However, going into 2022, my sentiment is exactly the opposite and I would take my profits and take an exit if not taken already.
DHA Lahore Commercial Investments Forecast
I strongly recommend commercial investments if you have the resources because they can build your rental income. So if you invest in developed areas and build a commercial plaza, not only do you take advantage of the construction relief package, but you also build yourself some good rental income.
In addition, when I reviewed the FBR values announced in Dec 2021, I found an anomaly that the FBR commercial prices were not raised like the residential plots. This may be deliberate or by mistake, but if in final valuation tables FBR values of commercials won’t match the real prices, we may get an idea where black money will park.
Defence Raya Commercials
Defence Raya surprised everyone with a major speculative move managed by big players. However, this year I am certain you will not see any growth. I still believe the prices are inflated and should be prone to correction.
As for rental income, it is a well-planned commercial area and should offer good rental income in times to come. Although, as of now due to a huge supply of rental income, opportunities may suffer for some time.
CCA 1 & CCA 2 of Phase 8
The thing is that it may gain as Phase 8 develops, but in the presence of Broadway commercials, CCA 1 and 2 don’t seem attractive to me. The best bet is to stay away.
Broadway commercial Phase 8
This is going to be the biggest commercial market of DHA Lahore in years to come. So it is always wise to take advantage of lower prices and invest. This is the place that can be the next commercial hub of DHA after Phase 6 MB.
Prices in CCA 1 & 2 of Phase 8 and Broadway are almost similar as of now. However, that may change as time passes, and comparing both, Broadway has a much better chance of developing into a premium commercial hub.
Park View 4 Marla files Phase 8
This a very unpredictable area as DHA failed its investors. Billions of rupees are stuck in these files and there is no clear policy announced so far. A lot of rumors and news keep coming in the market but ultimately they all prove to be fake. My advice is to take an exit instead of sticking with a failure unless you have a huge portfolio and a 20 M investment doesn’t bother you.
MB commercials
Best place for steady rental income is DHA Lahore. MB has established itself as the commercial hub of DHA Lahore and we will see more activity in 2021. However, prices shall remain stable because of rental income prospects.
CCA 2 Phase 6
Why bother when you have MB? Keep your focus on MB in Phase 6 in 2021 until the Bedian road expansion project. If you are looking for a mid-range commercial investment, then the Broadway commercial of Phase 8 is more relevant.
CCA 1,2,3,4 & 5 Phase 7
Yes, the prices increased in Phase 7 but that is because they increased everywhere. This area can not produce optimum rental income, for now, so only consider it for investment if FBR undervalues it in valuation tables for short and mid-term capital gains.
9 Town 4 Marla Plots
If you want to invest in low price commercial in DHA Lahore, this may be an option because of the chances of Bedian road expansion. Although not expected to give you huge returns in 2022, it is a valid investment for mid to long-term investment.
Zone 1 , 2 & 3 & Oval commercial Phase 9 prism
The possession announcement in Q and R block has skyrocketed the prices of commercials in Zone 1. I still consider 9 Prism prices to be part of a speculative bubble and will not recommend investment in 9 Prism except for a short-term trading opportunity, if applicable.
DHA Phase 11, Phase 2 Ext Rahbar commercial
You can not invest everywhere, select the best in your budget. In this investment, look at 9 Town commercial or preferably Phase 7.
Other Cities Forecast
DHA Gujranwala forecast
ARY Laguna has been launched in DHA Gujranwala in 2022. This could spark interest in speculative traders and I see files performing well above average. The excitement may be short-lived for DHA Gujranwala with minor highs. It is best to buy balloted plots on a correction or for a mid to long-term trading plan.
DHA Multan forecast
Our focus remained on DHA Multan in 2021 and finally, we got rewarded. The best strategy is to focus on select areas and be patient. I was focused on DHA Multan and gained more than most who moved their investments around in Pakistan. Commercials in DHA Multan didn’t gain as much as the residential plots as expected in 2021. However, now the prices are going to be more stable, with at least one major spike in 2022, which should give you a great opportunity to take an exit if you are an investor.
DHA City Karachi
DHA City Karachi is all set for some great gains in 2022. The prices have been lower for many years and even the uptrend in 2020-21 made a little difference. The 1 Kanal plot price ranges from 1 to 1.6 crores and I foresee atleast a 20 to 30% gain in 2022.
DHA Quetta
DHA Quetta is a ticking time bomb and if you have missed the train in 2021, do not worry and get carried away by buying at a higher price. If you have listened to us in 2021, you should not care anyway as you made similar or maybe more money in DHA Multan in 2021. I am more of a fan to go for a surest option rather than gambling in areas; I doubt.
Gwadar real estate forecast
While the real estate prices across Pakistan grew in 2020 and 2021, Gwadar real estate has shown negligible change. The low prices may spark the interest of the investors in 2022 or 2023. Although a bit risky. Your money is safe as you will buy at lower prices and can hold it for a couple of years to sell when the market rises. It will not be a surprise to me if investor focus shifts to Gwadar in 2022.
If you have a big portfolio of investments, it may be the right time to put some eggs in Gwadar for the long term.
Conclusion
I feel that speculative trading in plots & files will be under a lot of pressure in 2022 as unpredictability surrounds this sector. Most of these residential plots and files have gained more than a 100% in 2020 and 2021, therefore risking to invest further makes little sense to me. It is better to take an exit and wait for the next opportunity. If you are fearful of losing the next uptick, it may be best to invest in rental properties or construction projects while you wait.
The best places you can look into in 2022 are carefully selected areas in Gwadar, commercial plots in certain sectors of DHA, serviced and hotel apartment construction projects, and any other rental properties.
Lastly, this analysis may change in the future after valuation tables are announced so remain tuned.