In Capital city, speculators have taken land prices to a level where urban land cost is now the single largest item in 'fixed capital cost' of business. According to a property dealer Shahzad in Blue Area, property dealers purchase properties and hold them for some time. Next, they collude to purchase properties from each other on paper and raise the prices.
A similar method is applied by builders launching new schemes. They book several properties for themselves on paper to create a market impression that there is great demand for property to induce potential buyers on the fence to actually make a booking, sometimes at a premium. Recently launched report 'Agenda for sustained economic revival', Dr Kaiser Bengali states that land price escalation is due to speculation, which is facilitated by flawed institutional factors that facilitate under valuation. "This malpractice is made possible as there are no controls on land/ property trading and the trading regime allows pervasive under valuation of land/ property at the time of registration of a sale".
Another property dealer, Sami Khan said speculative trading in land means that neither seller nor buyer is interested in the property and it is the files which are traded. He maintained that profits from land/ property speculation have reached to a point where small industries in Islamabad are shutting down to make a way for upper income housing schemes.
In his report, Dr Kaiser suggests that the government has to take measures to ensure efficient and equitable use of land. He recommends like other countries, the government must introduce the right of the first purchase, impose capital gains tax on property sales and all purchasers of high valued land should be tax audited.
Another real state property dealer Mohammad Ali said that property prices have shot up in Islamabad - as the law and order situation continues to force residents to go there from other parts of the country. This is particularly true of Karachi, Peshawar - from where there is massive influx to capital city. 'The land prices have doubled in Islamabad and its adjacent areas.