Comparatively which size is a better buy for 5 years investment in DHA Lahore Phase 9?
Currently:
5 Marla DHA 9 file is at 11.80 Lakh
10 Marla DHA 9 file is at 19.30 Lakh
1 Kanal DHA 9 file is at 31.25 Lakh
In DHA and other housing scheme generally there is a multiplication factor (for price) of 1.4 to 1.6 for a double sized plot with an average MF of 1.5:
i.e. generally
Price of Average 10 Marla plot = 1.5 X Price of Average 5 Marla plot.
Price of Average 1 Kanal plot = 1.5 X Price of Average 10 Marla plot.
Based on anticipated price of 5 Marla @ 40 Lakh (excluding development charges) and the MF (multiplication factor) of 1.5, after 5 years prices of average plots in DHA Lahore Phase 9 will be:
5 Marla at 40 Lakh
10 Marla at 60 Lakh
1 Kanal at 90 Lakh
40
40 X 1.5 = 60
60 X 1.5 = 90
Please note there are EXCEPTIONS based on skew in supply relative to plot size and demand of end users for particular sizes. Example: price of 2 Kanal > 2 X Price of 1 Kanal in DHA 6 and 7 due to very little supply of 2 Kanal plots and relatively high demand from home makers with deep pockets.
And currently this general rule does not apply to 5 and 10 Marla plots in DHA 9 where price of average 10 Marla plot is almost double of the price of average 5 Marla plot. But based on the anticipated supply (a large number of 10 Marla and one kanal plots be sold to public on installments) and demand of small to large sized plots it is safe to assume that after balloting this general rule of 1.4 to 1.6 MF will hold likewise in DHA 9. Keep in mind however that despite MF of 2 in DHA 9 plots, the MF for the files is 1.62 to 1.63 at this time (11.80, 19.30 & 31.25).
31.25 / 19.30 = 1.62
19.30 / 11.80 = 1.63
As mentioned above, it all depends on supply of smaller sized plots compared with the supply of larger sized plots, and demand from the potential home makers. Small sized plots (5 and 10 Marla) in large numbers are relatively a new phenomenon in DHA 9.
So, assuming average price of 5 Marla at 40 Lakh (excluding development charges) after 5 years, the anticipated prices (in Lakhs) and Price Appreciation will likely be as follows:
BOTTOM LINE: If the MF goes above 1.62 the larger size wins and if MF goes below 1.62 smaller size wins (very likely to be around 1.4 or 1.5) especially 1 Kanal Price will very likely be equal to 1.4 X 1.4 X 5 Marla Price, since there will be so many one kanal files compared with smaller sizes. The uncertainty about 10 Marla price will remain till announcement or lack thereof of more 10 Marla plots.
(Sorry for being too hypothetical about baseline price. No one among us knows the future, but there is some essential tadka of currently verifiable facts applied to possible future scenario of that baseline price)
Courtesy: LRE
Currently:
5 Marla DHA 9 file is at 11.80 Lakh
10 Marla DHA 9 file is at 19.30 Lakh
1 Kanal DHA 9 file is at 31.25 Lakh
In DHA and other housing scheme generally there is a multiplication factor (for price) of 1.4 to 1.6 for a double sized plot with an average MF of 1.5:
i.e. generally
Price of Average 10 Marla plot = 1.5 X Price of Average 5 Marla plot.
Price of Average 1 Kanal plot = 1.5 X Price of Average 10 Marla plot.
Based on anticipated price of 5 Marla @ 40 Lakh (excluding development charges) and the MF (multiplication factor) of 1.5, after 5 years prices of average plots in DHA Lahore Phase 9 will be:
5 Marla at 40 Lakh
10 Marla at 60 Lakh
1 Kanal at 90 Lakh
40
40 X 1.5 = 60
60 X 1.5 = 90
Please note there are EXCEPTIONS based on skew in supply relative to plot size and demand of end users for particular sizes. Example: price of 2 Kanal > 2 X Price of 1 Kanal in DHA 6 and 7 due to very little supply of 2 Kanal plots and relatively high demand from home makers with deep pockets.
And currently this general rule does not apply to 5 and 10 Marla plots in DHA 9 where price of average 10 Marla plot is almost double of the price of average 5 Marla plot. But based on the anticipated supply (a large number of 10 Marla and one kanal plots be sold to public on installments) and demand of small to large sized plots it is safe to assume that after balloting this general rule of 1.4 to 1.6 MF will hold likewise in DHA 9. Keep in mind however that despite MF of 2 in DHA 9 plots, the MF for the files is 1.62 to 1.63 at this time (11.80, 19.30 & 31.25).
31.25 / 19.30 = 1.62
19.30 / 11.80 = 1.63
As mentioned above, it all depends on supply of smaller sized plots compared with the supply of larger sized plots, and demand from the potential home makers. Small sized plots (5 and 10 Marla) in large numbers are relatively a new phenomenon in DHA 9.
So, assuming average price of 5 Marla at 40 Lakh (excluding development charges) after 5 years, the anticipated prices (in Lakhs) and Price Appreciation will likely be as follows:
Plot Size | Current Price | MF 1.4 | 1.5 | 1.6 | 1.7 |
5 Marla | 11.80 | 40 | 40 | 40 | 40 |
10 Marla | 19.30 | 56 | 60 | 64 | 68 |
1 Kanal | 31.25 | 78 | 90 | 102 | 116 |
Price Appreciation | MF 1.4 | 1.5 | 1.6 | 1.7 | |
5 Marla | 339% | 339% | 339% | 339% | |
10 Marla | 290% | 311% | 332% | 352% | |
1 Kanal | 251% | 288% | 328% | 370% |
BOTTOM LINE: If the MF goes above 1.62 the larger size wins and if MF goes below 1.62 smaller size wins (very likely to be around 1.4 or 1.5) especially 1 Kanal Price will very likely be equal to 1.4 X 1.4 X 5 Marla Price, since there will be so many one kanal files compared with smaller sizes. The uncertainty about 10 Marla price will remain till announcement or lack thereof of more 10 Marla plots.
(Sorry for being too hypothetical about baseline price. No one among us knows the future, but there is some essential tadka of currently verifiable facts applied to possible future scenario of that baseline price)
Humza replied on Saturday, December 1, 2012 09:00 AM PST I love this type of discussion and analysis. Well done and highly appreciated everybody efforts and knowledgeable thoughs. |
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