Real estate sector is the pillar of economy of any country. According to the World Bank research, about 70-80% of the entire country’s wealth depends on the industry of real estate of that country. With the success of the real estate sector, the economy and wealth of that country surely rises.
Every country/state faces distinct challenges in its real estate market and its real estate sector possesses unique and different level of potential.
Similarly, the industry of real estate in Pakistan also plays a major role in the economic development. It is one of the fast-growing sectors in Pakistan, and its size is estimated to be $300 to $400 billion.
Real estate sector of Pakistan has a lot of potentials, but along with that it has to confront many challenges, and that is the reason that even though of being the largely growing sector, still the country lacks the most basic necessity of life i.e., housing. And this shows that a lot of improvement is still required in this sector.
Here we will discuss some potential challenges of real estate in Pakistan, along with the few solutions that can be made in the future to overcome the deficiency in this sector.
Real estate market in Pakistan
In the last few years, specifically after 2017, we have seen a drastic loss in the market of real estate in Pakistan. It is because of various factors like political and Govt instability, increasing crime rates, strict FBR laws, Covid-19 situation, Locust’s attack. Along with other industries, real estate in Pakistan also suffered a lot in these situations.
But the year 2020, turned out to be a game-changer year regarding real estate Pakistan, In the start, investors suffered a big crash and many difficulties, but as it is said ‘all well when ends well’, 2020 ended with brining various benefits and opportunities in Real estate business and industry in Pakistan. and it is predicted that the fiscal year 2021 will add up in this increasing growth rate. The factors such as remission scheme, the building industry relief package of PM Imran Khan & the new policies for the sale and purchase of property have absolutely flattened the country’s real estate industry.
Real estate business in Pakistan:
People have stopped investing in this sector, because of less demand of the real estate assets, and as a result we have witnessed a clear declining rate in its prices.
Most of the people were selling their properties at cheaper prices than usual, just to gain the cash at hand as an emergency financial resource.
Owing to less demand & reduction in the prices, it is a great chance for those with savings to invest further in the industry of real estate Pakistan. people with funds are making an investment ever more at low down rates to earn a profit in the foreseeable future at very high rates. Because of this, markets of Real Estate investment in Pakistan are pretty performing good.
Top real estate companies in Pakistan:
Since from the investment point of view, currently investing is proved to be useful in real estate Pakistan. now the question arises that which company and service a person should avail whether it is the case of buying property, or selling or renting etc., as there are a ton of agencies and companies working in this sector. This is the most asked question, specially among the new buyers in the industry.
So, mentioning a few of the best and Top real estate companies in Pakistan, so that you can take their help:
- Sirmaya
- Square Nine International
- Bahria Town
- Jagah Online
- Zameen
- Chohan Estate etc,
Real estate Investment in Pakistan:
The Pakistan Real Estate predication about 2021 appears to be going in a good way as various other opportunities for investment are currently being abandoned because of their volatile and unstable nature.
It is predicted that FY21 is set out to be the year of expansion for the market of real estate in Pakistan because too many reasons. Some reasons that make real estate Pakistan a suitable spot to invest are being discussed below:
PM real estate Schemes:
PTI government is introducing time to time, new schemes, and opportunities, so that overseas Pakistanis can invest in Pakistan, bringing dollars to the country and thus boosting country’s economy.
PM Imran Khan has also launched recently real estate schemes for Pakistani’s living in abroad, through which they can invest and buy Pakistan’s property at lower prices and reduced tax rates. This will bring a lot of potential in real estate business in Pakistan.
Tax Reduction:
In order to lessen the economic effect of the pandemic, In the budget FY21, the Pakistan Govt has decreased the interest rates & declared inducements for the financiers & entrepreneurs. The tax amount will be set up for the construction work & the income tax withholding will be dropped.
It is splendid news for the construction sector with the dual aim of delivering work to daily wage workers & encouraging economic activity. So, it is the best time to invest in the real estate in Pakistan.
Tourist strategy:
Government of Pakistan is coming up with different tourist strategies to attract more tourist to the country and thus promoting Pakistan’s tourism sector.
Tourism sector has a direct link with the real estate sector, and by boosting tourism sector the other will also get benefited and as a result economy will rise.
When comparing to past few years, recently the Tourism industry in Pakistan has observed a noticeable increase, primarily because of several initiatives, specifically enhanced security condition.
Enormous increase in the travel industry will compel foreigners to purchase real estate in Pakistan, and it will attract the foreigners to buy properties here.
CPEC impact:
CPEC is another massive project for development that will change the economy of Pakistan & as a result, in the future the real estate industry will increase extensively.
Since CPEC has shown itself to be the innovator of the transformation in Pakistan’s economy, so it also has a direct effect on Pakistan real estate sector.
CPEC zones are still in process, but we can see clearly its positive effects on various sectors of Pakistan. It also has altered the sector of real estate in Pakistan. Since through CPEC, Gwadar seaport and Kashgar(China) are linked, and this connection is predicted to be serving as a key trade route between the two countries.
Because of the tremendous success of CPEC, Real estate market of Pakistan has gained the investors’ attention from all over the globe.
Owing to the CPEC trend, real estate projects have noticeably increased along with the increase in Price,
Gold prices:
The unstable gold price has also provided many benefits to the real estate sector of Pakistan.
Since, most of the time people invest in Gold as it operates multiple targets. But in recent times, Gold is confronting a very unbalanced market. Its rates can increase to $2000 per bit to float in a downward direction quickly.
This thing has driven out many investors as they believe it is not the right time for a safe investment in gold. As a result, their investment is going into the Pakistan’s real estate marketplace.
Stock market:
Since the stock market sector is very volatile and demands decisions to be made with in few seconds. Only experts in the field can survive here. This is not a safe investment for those investors who are not prepared to take extreme risks.
And this is the reason investors more willingly invest in the real estate sector.
Challenges:
None can deny the fact that the coming years will be an expansion of the real estate sector. However, there are certain challenges to progress in the real estate sector in Pakistan.
Land mafias:
The fundamental challenge in the development of the real estate sector is the power of land mafias, the investors are afraid to invest in such situations, because they do not feel safe to invest.
The mafia, in Pakistan, thinks empty buildings and plots as a popular issue for illegal investment as they could raise the return ratio be up to 1 thousand%. Initially, they made the false stamp paper & the registration and Subsequently Stay they received an order from the court.
Improper documentation:
Another big problem in the real estate market of Pakistan is that of improper documentation of Lands. The property is disputed and not properly documented. Thus, investors do not invest in such conditions.
Uneducated dealers
The market real estate in Pakistan has been engulfed by uneducated and illiterate traders and dealers that do not have the knowledge and experience to guide the people beyond in the sector, which later results in frauds.
Strict FBR rules:
The main reason due to which Pakistan real estate sector has reached to its highest potential is FBR strict rules and regulations. Administration needs to realize that their projects; 5 million housing schemes & 10 million job policies will only be effective if the real estate sector of the country grows.
Lack of Digitalization in the sector:
One of the most important factors is that real estate records should be digitalized & made easily accessible to prospective buyers. This is also wholly coherent with the PM digitalized Pakistan’s concept.
Not specified rules for the real estate sector:
Another major issue in the real estate in Pakistan is that this sector has no specific rules and laws. There are no specified penalties law breakers here, the court cases take a long time to solve. And no proper education degree present for this sector.
Conclusion:
For real estate business is Pakistan, the year 2021 is predicted to be very helpful and beneficial, but we must look at various factors and would do our best to overcome these issues.
Government should work more in this sector, as 70-8-% of our economy depended on this industry.
Even though this sector is booming but the speed has to increase to achieve the desired goals.
