Housing 'hungama' amid economic crisis

KARACHI - The construction of a number of important housing plazas had been launched in Karachi during the past few weeks. These real estate schemes had been kicked-off with a big fanfare at a time when the country is going through a variety of crisis that has stunned many people. Before the launching of these schemes, the DHA Islamabad launched plots scheme that received an overwhelming response from the investors and the general public and it encouraged the other builders to roll-out the new schemes in the country. After the success of plots scheme, the DHA Islamabad had now launched a scheme to offer completely built housing units to the buyers and this scheme is expected to meet with success because of the good image, past record of the DHA and the worth of real estate in the precincts of the authority. In Karachi more than 10 new housing schemes had been initiated during the past few weeks that have become talk of the town. The real estate developers are of the opinion that the housing and commercial plazas new schemes had been started to attract the unutilized capital lying with the people. They said that the stock market had collapsed during the past few months, the banks are offering low and unattractive rate of return on long-term deposits, the overall business is facing slump and in this scenario the prices of property are at bottom and very attractive for investment. Details gathered by The Nation showed that the builders are demanding less than 100,000 rupees as down payment for the booking of an apartment while the actual amount, including loans, is not being disclosed to the customers. For example, a builder is offering booking of an apartment for Rs one million, excluding bank loan, to be obtained by the builder that will be paid by the buyer from the day the apartment is completed and handover to him. The builder, however, is informing the customers about the amount of 1.5 million rupees loan, but not mentioning the tenure of the loan and the total amount to be paid by the customer along with mark-up. If the annual mark-up is in the range of 18-20 per cent and the repayment tenure is 10 years, the buyer would have to pay 4.5 million rupees - 1.5 million rupees principal amount of loan and 3.0 million rupees mark-up. Thus the actual price of the apartment would be 4.5 million. This price, however, would vary is the percentage of mark-up and repayment period is different. The real estate experts said that a big proportion of remittances is expected to be invested into the new housing schemes and attractive plots. They said that the ongoing economic recession, rumours about bank defaults and collapse of stock market had made the investors and general public cautious and now the only option of investment with them for the real estate sector. Seeing this situation a number of housing developing companies in the country have started new schemes to attract the unutilised money lying with the rich people and the investors.

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