Which plot size performed better in the last one year – A case study from Lahore!

If you have been following up on the real estate buying trends as of late, you must have observed that while investment activity continues to shrink, Pakistan’s property market has started to register demand among the end users.

With prices gradually dropping due to absence of property flipping practice, many buyers in genuine need of purchasing real estate now actually find that market rates are closer to the amount they are willing to pay. But how much variation was recorded in the rates of residential plots in the last one year? Let’s have a look at it with Zameen.com’s data recorded for Lahore.

Important note

• The data and findings shared in this report are based on over 3.4 million property listings uploaded on the portal from Lahore alone.
• This data doesn’t specifically hint at performance of a single society, but attempts to present an overall pictures of the market’s performance in the last year.
• The report is based on data taken from May 2017 to April 2018.
• The rates shared in this report are the average asking price extracted from the property listings uploaded on Zameen.com between the mentioned months.

Performance of 1-kanal residential plots

Residential plots sized 1 kanal is the prime plot category in real estate developments targeting affluent buyers. In the past, especially during the boom cycle of 2013, transaction volume and thus price appreciation recorded for the plot size was prominent. In fact, the appreciation in rates continued till a couple of months after the new tax regime was introduced in July 2016. This graph shows you what we are taking about:

Lahore, 1 Kanal Plot Price Index

Soon after the drop seen in market demand, property rates also started to depreciate at subtle levels. Between May 2017 and April 2018, the price of 1-kanal residential plots dropped marginally by 1.37%. While the rates appear to have started to bounce back in March 2018, it is too soon to deduce that the market is preparing for a comeback. Here is how price trends for 1-kanal plots over the past one year appear on a graph:

Lahore, 1 Kanal Plot Price Index – May 2017 – April 2018

Performance of 10-marla residential plots

This plot size has been gradually becoming a popular one among genuine buyers and consequently, the 10-marla plot inventory has also increased in recent real estate developments. The popularity of 10-marla plots can be well gauged from the fact that between January 2013 and October 2016, their rates increased by a whopping 163.57%. Here is what the journey looks like on the graph:

Lahore, 10 Marla Plot Price Index

Despite registering over 163% growth in the past, 10-marla rates also started to register drops in the post July 2016 period. Between the chosen months, the rate dropped by 1.57%. Just like their 10-marla counterparts, growth in rates was registered in March, which continued through April as well. But to reach a concrete conclusion, we need a couple more months to observe these stats. Here is a graph showing the performance of 10-marla residential plots in the last one year.

Lahore, 10 Marla Plot Price Index – May 2017 – April 2018

Performance of 5-marla residential plots

Noticing that the value of 5-marla residential plots hasn’t really plunged in the past is not a big surprise. For as long as the housing shortfall will exist in Pakistan, the demand for 5-marla and smaller residential plots will stay intact.

Between January 2013 and September 2016, the value of this plot size increased by 139%. Have a look:

Lahore, 5 Marla Plot Price Index

During the last one year, the performance of 5-marla residential plots has been the best among its larger counterparts. After taking a breather in June 2017, prices started to bounce back in July. While the overall growth recorded in these months is decent at 4.58%. Have a look at how the graph shows this elevation.

Lahore, 5 Marla Plot Price Index – May 2017 – April 2018

So, its 5-Marla residential plots that outperformed 10-Marla and 1-Kanal plots in Lahore.  We believe that the way new taxation system treats smaller plots when it comes to imposing property taxes is the reason why the performance for 5-Marla plots has been better. What do you think is the reason behind it? Let us know through your comments!