Is the trend for luxury mansions, fancy villas and opulent bungalows on its way out?
Valuemag investigates and finds out that town houses are the hot new trend in Real Estate
By Saeed Khan Baloch
ot too long ago, majority of our rich folk preferred living in big houses surrounded by vast tracts of lands to denote their status and affluence levels or simply because they were rich and they could do so. But now due to growing commercialism and constantly escalating cost of living and doing business, even our rich populations are more inclined to live in comparatively smaller and simpler homes, which are not only affordable from living standpoint, but are also considered commercially viable. Experts say that big houses are now losing their charm, and with passage of time, their demand is expected to decline further because of high costs of land and construction as well as other allied expenditures. Small houses are gaining more significance since they are easy to manage and are comparatively low maintenance, they say.
A recent survey report shows that in cosmopolitan cities like Lahore and Karachi, people are demolishing their huge bungalows and constructing smaller houses over the same land because of commercial and monetary reasons. People associated with the construction industry say that a bungalow constructed over a plot of two Kanals, for instance, gives much less price than that of the three small units erected over the same piece of land. Moreover small houses are easier to sell while it’s very difficult to find buyers for big houses or projects. Big houses are now just a status symbol and only the people having feudal background prefer them, just to impress others. If we look at the commercial aspect, investors prefer investment in small housing units to get better yields and this could be well gauged from the fact that all big residential schemes being launched in metropolitan cities, especially in Lahore, Rawalpindi/Islamabad and other big cities comprise five Marlas, seven Marlas and ten Marlas. In Lahore, all the new residential schemes and even those completed some years ago mostly consist of five to ten Marlas.
In Lahore, Alhamad Town, LDA Avenue, Punjab Housing Society, Pak Arab Housing Society, Overseas Pakistanis Foundation (OPF), Eden Abad etc are mostly of five and ten Marla plots. Even Bahria Town Rawalpindi falls in this category. In case of comparatively old schemes in Lahore like Allama Iqbal Town there are only a few blocks where one could find big houses spreading over one or two Kanals. Similar is the case with Sabzazar Housing Scheme, where the number of one-Kanal or two-Kanal houses is far less than that of the small ones. Statistics gathered from various Real Estate agents reveal that out of 20 plots they sold, eight were of three Marlas, six of five Marlas, three of ten Marlas, two of one Kanal and only one plot of two Kanals. “What I have observed in the last few years in my business is that multiple digit inflation and high cost of construction has forced people to change their living lifestyles. Now, with increase in price of property, big houses are losing their charm gradually,” says a property expert in DHA Lahore. “Gone are the days when people used to be proud of having big houses and spending huge amounts for the sake of their so-called honor and prestige in society. Now commercialism has surmounted every other aspect. It would not be an exaggeration if we say that small houses are gradually overtaking the big houses,” he says. Owing to high maintenance cost, the ratio of having big houses even among the affluent class is on the decline. A property dealer in Lahore says, “If we calculate transactions of plots and houses of different sizes by percentage, the small ones are in great demand”. According to his claim, the demand of three Marla plots/houses is 40 percent, five Marla 30 percent, ten Marla 15 percent, one Kanal 10 percent and demand for two Kanal plots/houses is hardly 5 percent, and in certain cases even lower than that. Experts believe that with formation of the new democratic government in the country and its commitment to providing shelter to the poor segments of society has caused a sense of optimism among the people associated with Real Estate business, construction and allied industry, and they foresee a hectic activity in housing and construction sector in the upcoming months. However, some believe that for the time being business transactions might remain stuck owing to budget fears.
They say if the government in federal budget 2008-2009 (as is being strongly speculated), levies new taxes on big plots and houses or even increases the existing tax ratio, the demand of small plots/houses will grow further. The unabated trend of migration of rural population to urban areas is also expected to give a boost to the housing sector with increased demand for small houses. The cosmopolitan cities of Lahore and Karachi are expected to be ranked among world’s mega cities category by the year 2025, says a United Nations report. The report provides official UN estimates, projections of urban, rural cities’ populations of all states in the world up to 2050. “Urbanization is growing everywhere,” quotes the report citing Hania Zlotnick, the Director Population Division, head of Department of Economics and Social Affairs. She says mega cities with more than 10 million inhabitants account for approximately 9 percent of the world’s urban population. The fastest growth rates are likely to be found in African cities—Lagos, Nigeria, Kinshasa while in Pakistan cities like Lahore and Karachi. The world population is estimated to increase by 2.5 billion by 2050. By that time, urban population is expected to rise from nearly 3.4 billion in 2008 to 6.4 billion in 2050; as with general population growth, most of urban increase will take place in developing or less developed countries as compared to developed states, where 74 percent population already dwells in big cities and towns. According to the report by 2050, 54 percent of population in Asia and 19 percent in Africa will live in cities.
The growing population has sent alarming signals to these countries’ governments. Experts say, the rising population and ever-increasing migration from villages to cities means we need more housing units for the urban population. Our planners/experts need to make pragmatic and comprehensive strategies and design housing units in a way that maximum people could be accommodated and the cost of accommodation also doesn’t go beyond their reach. ■
This article was originally published in the print edition of Valuemag, issue 3 – July 2008