Both Federal and Provincial governments must be compelled to auction lands at regular intervals to help bring down the inflated prices and also offer clear titles of land to the individual buyer and the builder- such state lands are being encroached every day or are politically rolled out.
Sindh law states that commercial land of over 120 square yards cannot be allotted to anyone without a proper, transparent, declared, and advertised auction. However, often no land auction takes place, and commercial plots are given to people without any auction and through a clandestine and non-transparent manner.
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This subsequently results in inflated prices of all the land, as the government loses any authority over the control of the market and the supply of these commercial lands.
For instance, land in one of the prime locations in Karachi i.e. Shahrah-e-Faisal ranges from around 8 to 10 lac per square yard (FBR values, declared to FBR, are often 1/10th of actual market values), this price hike in commercial lands is a consequence of the lack of auctions held at regular intervals by the Federal or Provincial governments.
If the Federal and Provincial governments start a regular process, preferably every six months, of rolling out land in auctions, it would result in a controlled market of land across the board. This would also increase the supply of legal land with clear titles offered to the individual buyer and the builder.
With the influx of legal land auctioned by the concerned government department, the prices of commercial land across Pakistan, as a consequence, would be much more reasonable as the market is more accessible and opens up a lot of investment opportunities for more people. The regulator is also likely to raise billions in revenue during the process.
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Capital Development Authority (CDA) holds auctions, and recently, in a two-day auction held at Pak-China Friendship Center, presented land for auction in various localities of Islamabad. Prime land on the main Jinnah Avenue in Islamabad was auctioned for billions of rupees.
This resulted in investment opportunities for the builders, generated revenue for CDA, and created numerous employment opportunities in the process. It also gave CDA the ability to declare market prices of commercial land and set a precedent for the future land prices of the area.
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However, even in this case, the fact that CDA does it —not after several months, but years, means land is more expensive than it needs to be. All government development authorities, CDA, LDA, or KDA, need to hold more regular auctions of commercial land and should do so under a predefined time period to give clear titled land for buyers.
The introduction of a digitalized land record is also likely to make the process of land acquisition and distribution easier for both the investor and the regulator, respectively.