Karachi Property Market: A Two-Year Surge and the Shifting Investment Landscape
Karachi’s property market has experienced significant growth over the past two years, though gains haven’t matched the impressive returns seen in equities and gold. While the KSE-100 Index nearly tripled in value between January 2024 and February 2026, and gold prices saw substantial increases, real estate has steadily climbed, presenting a complex picture for investors.
DHA and Clifton: Leading the Price Increases
The most pronounced increases have been observed in the upscale neighbourhoods of DHA and Clifton. According to Muhammad Shafi Jhakvani, vice president of DEFCLAREA, residential plots in these areas have risen by 25-50% over the last two years. Commercial plots have seen even more dramatic increases, surging by 25-75% during the same period.
Apartment prices are likewise on the rise. A three-bedroom apartment in Clifton’s Bath Island or Civil Lines, previously priced at Rs 55-60 million in 2023-24, now commands between Rs75-80 million, and even higher in some newer projects. In DHA, a 1,500 square feet apartment has jumped from around Rs30-32 million to Rs40-45 million.
Bungalows are also experiencing price appreciation. 500- and 1,000-square-yard bungalows have increased in value by 10-25%. Rental yields, typically around 3-4% annually, are also seeing a slight increase, particularly in smaller units due to limited inventory.
The Rise of Modern Bungalows and Changing Construction Trends
A notable trend is the construction of new bungalows as ground-plus-one units, often incorporating amenities like swimming pools. Abdul Wahab Parekh of Parekh Estate notes that a 500-yard ground-plus-one bungalow now costs between Rs100-250 million, up from Rs80-160 million two years ago. Larger 1,000-yard bungalows have seen a similar increase, ranging from Rs130-450 million compared to Rs110-350 million previously.
Commercial Property Hotspots and Price Dynamics
Investors are particularly active in Clifton’s commercial plots, driving up prices significantly. DHA Phase 8 is also attracting considerable investment. Commercial plots in PECHS and along Sharea Faisal have seen prices climb to Rs1.5-2 million per square yard, a substantial increase from Rs1-1.2 million earlier. Rates on Shaheed-i-Millat Road have also risen to approximately Rs1.5 million per square yard, up from Rs800,000 to Rs1 million.
Industrial Investment Shifts Away from Karachi
While residential and commercial sectors are thriving, the industrial sector in Karachi is facing challenges. There has been limited new investment in Karachi’s industrial areas over the past 50 years, with many owners repurposing land for non-industrial uses. This has led investors to look towards alternative locations like Nooriabad and Jhampir, where land rates are lower.
Concerns regarding land disputes and security along the Super Highway are also contributing to this shift, with approximately 60-70% of the land considered “risky and controversial.”
North Nazimabad: A More Stable Market
In contrast to the rapid growth in DHA and Clifton, North Nazimabad’s property market has shown more moderate changes. A 240-yard ground-plus-one house has remained relatively stable at Rs55-65 million, while a 400-yard bungalow has increased to Rs60-70 million from Rs45-50 million. Apartment prices have also seen increases, with older units without amenities rising from Rs8-9 million to Rs10-12.5 million, and newer, fully-equipped units increasing from around Rs10 million to Rs15-17.5 million.
Frequently Asked Questions
Q: What is driving the price increases in DHA and Clifton?
A: Increased investor activity, limited supply of prime properties, and overall economic conditions are contributing to the price increases.
Q: Where are investors shifting their focus?
A: Investors are increasingly looking towards Nooriabad and Jhampir for industrial investment due to lower land rates.
Q: Is Karachi’s industrial sector declining?
A: The industrial sector has seen limited new investment in recent decades, leading to a shift in focus towards other areas.
Q: What is the current rental yield in DHA and Clifton?
A: Rental yields typically range from 0.25% per month to 3-4% per annum, with potential for slight increases due to rising property values.
