KARACHI, Feb 21: There has been no instant impact of the elections outcome on the property market. The estate agents in Karachi believe that the activity may pick up after the formation of a stable national government comprising of PPP and PML-N and MQM.

For the Karachi market specifically, much will depend on the strength of the PPP-MQM alliance. Any bickering between the two political parties may harm the property business. They think that it would be better business-wise if the PPP and MQM form the government in Sindh.

Property business has been dull for the last two years and in many areas there has been no appreciation in prices and instead prices have declined in many areas.

The people had made massive investments in booming real estate business in DHA and other areas like Gulistan-i-Jauhar following huge influx of home remittances during the period 2001-2005, which had pushed the property rates up by four to six times.

Many investors, after reaping huge profits from the boiling property markets two years back, had ventured into Dubai real estate market after losing hope owing to rising political tensions, and violence, especially in the last one year. In the last two years, many estate agents have opened offices in Dubai to cash their luck.

The imposition of two per cent capital value tax (CVT) one and half years back had also discouraged the investors to operate in the property market.

“A stable government and its investor-friendly policy will help make some recovery in property prices by 10-15 per cent, initially,” sales executive of Civic Associates Gulshan-i-Iqbal Abdal Magray said adding that the MQM-PPP cool relations are very vital for flourishing property business in Karachi.

He said many banks had also restricted their housing finance after cases of default. For the last six months, incidents like October 18 carnage at the PPP rally, imposition of emergency in November and killing of Benazir Bhutto on December 27 had further bottomed out buying and selling activity in property.

He added that only genuine sale and purchase is going on but in very limited numbers.

Owner of Johar Estate in Gulistan-i-Jauhar Abdul Wahab predicted increase in property rates by 25-30 per cent in case the PPP joins hand with PML-N and MQM to form governments at the Centre and in Sindh.

In case the PPP thinks about forming the government with PML-Q and does not include MQM in the Sindh government then the property rates may go in minus.

He said investors and even general public are confused as to who will form the government and that is why investors have been inactive in the market.

He said many estate agents had shifted to Dubai while investors had been active in Dubai market. Both can return home depending on the political situation in future, he added.

Abdul Wahab Parekh, chief executive of Parekh Estate in Clifton, said if the PPP-PML-N government was formed then the property prices are likely to rise by 20-25 per cent otherwise if the PPP tries to make government with PML-Q then the political situation will become uncertain.

He said If the political leaders caters for their own interest rather than interest of the voters and people in forming the government or in case any party tries to rescue President Pervez Musharraf , it will lead to a disaster for the business. He claimed that majority of the population did not want Musharraf to remain as president anymore.

He said the PPP could make a government in Sindh easily but in case it does not include the MQM in forming the government, the political situation will heat up, thus making a negative impact on the business activities, Parekh said.

He said many Pakistani property investors and estate agents were in Dubai these days but they will return only after the creation of a sound government. Currently, sellers have adopted a wait-and-see attitude after the general elections.

Many builders of the city had entered the Dubai market in a big way by introducing various flat and apartment projects there. These builders had excess money, which was generated from the bookings made in various projects launched in the city and they had invested this public money in Dubai.

Besides, some small and medium-size investors have also tried to cash in on their luck by booking various flats and shops in Dubai. These activities have been underway since March 2007.

Owner of Shams Real Estate at DHA Phase VI, Mohammad Hussain said that property price will go up by five to 10 per cent in case a firm government is formed. He said that property prices in many areas had declined by 15-25 per cent in the last one and a half years.

He dispelled the market impression that all the property investors were now in Dubai adding that only few had moved there. They will return after profit taking because Dubai is an international market where investors have to be very patient and they have to work in higher volumes, he added.

He said it was also true that some estate agents had set up their office in Dubai and even many builders are active there.

Owner of Pak Estate in Clifton Khan Zubair Shaheen said that only 8-12 deals (buying and selling of plots and bungalows) had taken place in DHA. He said investors had moved to Dubai where prices had doubled in the last one and a half years. He added that some eight to ten estate agents of Karachi had opened up their offices in Dubai.

However, he said it was premature to give exact percentage of increase in property prices after the new government is set up but the price will definitely go up.