If there was a “plot”, it certainly worked. A day after the Supreme Court banned buying and selling in Bahria Town Karachi, the real estate bubble seems to have deflated.
“The market rate of [the smallest]125-sq yard plot was around Rs2.5 million a week ago and has come down to its original rate of Rs1.7 million,” said an authorized dealer, who did not want to be named. This was big news in Karachi where real estate speculation has driven prices to impossible highs.
The verdict on Friday sent shockwaves throughout Pakistan as hundreds of thousands of Pakistanis had invested in the master-planned community run by tycoon Malik Riaz.
Bahria Town Karachi is one of Riaz’s many projects across the country. The court ruled, however, that the land was bought at throwaway prices from the Sindh government. Now it has said that Bahria Town must buy the land back at the proper rates.
The authorized dealer said the court has given Bahria a “lifeline” and he is sure they will repurchase the land.
Real estate dealers across the city spent a busy Saturday fielding panicked telephone calls from people. They tried to tell them to stay calm.
One of them, Qurban, a realtor in Gulshan-e-Iqbal, said his clients were asking what would happen next. “We have so far heard no word from Bahria Town management and are struggling to face the anxious buyers,” he said. “How could I placate the buyers when I am unconvinced?”
A spokesman for Bahria Town declined to answer questions. An official of Bahria Town, requesting anonymity as he was not authorized to speak to the media, told SAMAA Digital, however, that Malik Riaz would not compromise on his image and would certainly repurchase the land.
The real estate agents, however, are not necessarily going to pay a price. There are some who invested themselves, and they are worried, but it is the average person who paid for a plot who is worried.
“I have only one piece of property, and that is in Bahria Town,” said Nadia, a resident of Malir. She invested in it because of the name and its advertising. If she doesn’t get her plot now, she says, it will be a huge blow.
In the meantime, some real estate brokers are trying to ride the wave of panic. Client Ismail owns a 125-yard plot in Bahria Town. He said he needed money a few months ago so he decided to sell it. A property dealer had offered him Rs2 million, which was Rs300,000 over the actual value.
He didn’t go ahead then, but when he went back now, he was told he could only get Rs1.7 million for it.
Understandably, there is anger and confusion. Abdullah had bought a plot here in 2016. He said people have nothing to do with what Malik Riaz and the Malir Development Authority did when they did the land deal. He said that people have paid their installments on the plots and should be given possession of the land no matter what the government or Malik Riaz did.
“All the main dealers of Bahria Town are in Germany to attend a property expo,” said Shehzad Lateef, a property dealer working with Bahria Town. “They will devise a plan for future on their return.” He has been telling clients the verdict hasn’t had a negative impact on the market as a “specific area” is affected and not the housing scheme as a whole. But the court marked half of the project, or 6,000 acres out of the total of 12,000.
Either way, the verdict has affected the brand. Fawad Shah, an estate agency owner in Defence, says the verdict would not affect real estate business anywhere in Pakistan; however, Bahria Town has lost its credibility.
“Almost all Bahria Town projects have gradually been declared illegal, including the one in Islamabad and Lahore. There were also illegalities in the Karachi project on a massive scale,” he said. “We have realized that people are reluctant to invest in Bahria Town projects. Many allottees have withdrawn.”