SPECULATOR-FUELLED REAL ESTATE SCENARIO IN GWADAR
Nov 12 - 18, 2007
The operationalization of Gwadar port is expected to open a ribbon of economic activities and a real estate boom in coastal areas of Balochistan. The 770-KM long coastline of Balochistan along the Arabian Sea is 70% of Pakistan total coastal belt. The Singapore-based port operators have expedited their efforts to make Gwadar port functional by the end of this year.
The two port projects, Gwadar and Sonmiani, on the Balochistan coast have increased the value of land along the coastal belt. Some people say that the government announced to build another port on Balochistan coast to shift focus from Gwadar. The Sonmiani is currently being streamlined on the pattern of Gwadar. This remote area is attracting the attention of real estate mafia, who are currently engaged in speculative real estate business in Gwadar. The land prices in Sonmiani will skyrocket as soon as the President Musharraf performs the ground-breaking ceremony of the country's fourth seaport in Sonmiani bay by the end of this year. The government has imposed ban on sale, purchase and lease of various properties in Sonmiani to avoid artificial price hike of land.
SPECULATIVE TRADE IN REAL ESTATE
Speculative trade in real estate is booming in Gwadar. A huge speculative buying has been witnessed in Gwadar real estate since the groundbreaking ceremony of mega seaport project was performed by President Pervez Musharraf in March 2002. There is still a speculator-fuelled scenario in Gwadar that might crash. This resulted in unrealistic increase in the prices of property. The real estate agents are still luring the investors for buying industrial and residential plots in Gwadar.
Today, the property purchase in Gwadar is speculated as a good investment. Commercial and residential plots from one acre to 1000 acres are presently being sold and bought in many localities of district Gwadar such as zero point, west bay, east bay, Sangar housing scheme, Newtown housing scheme Chib Kalmati, Kiya Kalat, Washin Door, Door Ghatti, Ziarat Machi, Jaurkan, Shanikani Dar, Ankara, karwat, Shabi, Pishukan, main Jewani road, main Airport Road and main coastal highway. This year, the prices of residential, commercial and industrial plots have been on the rise particularly after the government selected the Port of Singapore Authority (PSA) for running the Gwadar port and signed an agreement with the Singaporean firm.
The government needs to check speculation and announce a proper housing policy for Gwadar. The government's decision of levying 2 percent capital value tax (CVT) on property transactions in the country has been instrumental in stabilizing the prices of property to some extent. The officials claim that there has been sharp decline in the prices of property since imposition of CVT on buying and selling of plots.
FLUCTUATION IN PROPERTY PRICES
Before the inauguration of Gwadar port this year in March, a fall in property prices in Gwadar was observed. The decline was mainly linked with the fears about security of investment in the politically volatile province. Moreover, a land scam involving big people also came to surface making people reluctant to invest their money in residential, commercial and industrial plots in the port city. This trend affected the prices of real estate as people who had purchased residential or commercial plots started selling them to save them from further loss.
The situation however, reversed after Islamabad had signed the agreement with the Port of Singapore Authority (PSA) for operating the Gwadar Port in February. Moreover, the governmentís announcement to establish a huge industrial estate, a free trade zone and other projects, including oil terminals, huge refineries, attracted the investors again to invest in Gwadar real estate. The provincial government has allotted plots in the Gwadar industrial zone for construction of warehouses to facilitate importers and exporters.
According to the local market sources, the inauguration of Gwadar port and announcement of various incentives by the federal government catalyzed the sale of plots in Gwadar. More than 50 private housing and commercial schemes are currently selling plots in the new port city. The prices of real estate have also increased by 100 per cent. A residential plot of 1,000 yard in Gwadar's Sangar Housing scheme was available at Rs1 million in January but today its price has doubled to Rs2 million. It is speculated that the price would further go up in Gwadar.
Political instability and unsatisfactory law and order situation has been hampering the real estate business in the province as a whole. The incidents of sabotage like bomb blasts, rocket attacks and attacks on national installations like rail tracks, gas pipelines and power grid stations have also restricted the investment in the property business in many districts of the province including Gwadar. At least six Chinese engineers have lost their lives in act of terrorism during last three years in the province. The main reason for delayed inauguration of Gwadar port has been the worsening law and order situation in Balochistan.
There are so many unanswered questions and unsettled matters of socio-political nature but frenzied world of real estate is being warmly welcomed. Critics in Balochistan view the development of Gwadar port with the active involvement of the real estate mafia as an attempt to convert the Baloch majority into a minority.
Major groups belonging to Karachi and Punjab are engaged in real estate and construction business in Gwadar. The business groups from Balochistan and other local investors especially those affluent and feudal figures should also come forward, purchase land for housing schemes and industrial estates in Gwadar and announce special package for the local buyers. Instead of beating the drums of safeguarding the legitimate interests of local people, they should make investment in the port city for local people. This would be a great service to their people on their part. Contrary to this, the local landlords are set to benefit from the opportunity and are keen to sell their property on the desirable cost to the interested builders and developers, who are presently active in launching new housing projects. In fact, these landlords of the area are the natural and primary beneficiary of the Gwadar port project. The value of their land has skyrocketed after operationalization of Gwadar port making them millionaires overnight.