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KARACHI: Builders and estate agents have pinned their hopes on the next general elections and expect an improved overall business environment conducive to fresh investment in the sector.
Dawn solicits views of builders and some estate agents regarding property business prospects during 2012 in the backdrop of elections and rising political tension due to clash between state organs.
Sharing their concerns, the builders said that the ongoing political instability as well as the target killings of estate agents in the last two years has led to fear and uncertainty among the realtors community.
Many feel that the property prices may witness downward revision but remain hopeful business activities will resume positively if the election results are good.
Chairman Association of Builders and Developers (ABAD) Mohsin Shekhani said that construction activities will definitely slow down in case elections are held this year.
'Investors usually feel insecure in the property business with the elections looming in.
However, much will depend on the policies of the new government,' he explained.
He said that at least 25 projects were announced by the builders in the newspapers despite 2011 being a very difficult year in which construction industry growth rate was just 0.8 per cent to the GDP.
'These projects were mainly launched during October-December 2011 period due to some improvement in law andorder situation and patrolling of Rangers. However, less than 20,000 houses and flats were added in Karachi last year as against the annual requirement of 100,000 units,' he maintained.
Highlighting the problems faced by builders, Shekhani said, 'A moratorium has been imposed on gas connections on high-rise buildings.
Besides, KESC connections are actually unavailable.
Temporary meters needed forstarting projects are denied or delayed beyond expectation.
GST is yet another issue with the Sindh Board of Revenue, he said.
The House Building Finance Corporation used to distribute Rs3 to 4 billion for housing projects but now it only provides loan for constructed houses and the disbursed amount has been reduced to less than Rs1 billion, he informed.
'I think the overall business environment, the law and order situation and the attitude of utility providing agencies are very discouraging at the moment,' he summed up.
Sharing a similar opinion, owner of Parekh Estate at Clifton Abdul Wahab Parekh said that sale and purchase activities will drop as the election nears.
Foreseeing an unstable situation during 2012 in case there is no settlement between the government and other state organs, he recalled that property business remained laggard from July 2010 to June 2011.
'There was some movement in shape of genuine buying and slight interest from investors in selected locations in posh areas was seen in July-December 2011.
This resulted in a rise in property prices by 10-15 per cent during that period. Many people belonging to the higher income group living in violence hit areas moved towards the calmer posh areas between this period, he added.
Owner of Johar Estate at Gulistan-e-Jauhar, Abdul Wahab said: 'If business minded people are elected in the new election, the property market will improve along with the overall business environment in 2012.
He said in some selected blocks of Gulistan-e-Jauhar like 2, 3, 14, 15 and 16 (often dubbed as peaceful areas), prices of residential bungalows and plots have increased by 10-15 per cent in 2011 but property business in law and order hit areas virtually collapsed or slowed down sharply.
