Is Pakistan Good for Real Estate?

Real estate is the most stable sector in Pakistan and it is growing significantly as time is moving forward. It directly makes up a hefty percentage of the total GDP of Pakistan. In fact, now this sector has started to attract global real estate investors too.

The real estate sector of Pakistan has been facing a slowdown since 2017 due to multiple factors such as political instability, the uncertainty of economic/financial policies, currency devaluation, and strict terms and conditions from international monetary institutes. But now, this industry is again on the way towards a boom, especially after the progress in Pak China Economic Corridor (CPEC) and construction amnesty scheme by Premier Imran Khan.

Worth of Real Estate Sector in Pakistan

The financial volume of an industry indicates how successful it is. The bigger the volume, the more it is contributing to the economy of the country.

The Bureau of Statistics estimated that only the developmental area of Pakistan generally gauges 2% of the GDP of the country. What's more, the housing/development sector is not exactly even 50% of the aggregate and is merely a part of the general real estate sector. It deals with hundreds of other direct and indirect businesses i.e. running a real estate agency, sale/purchase of plots, businesses producing/selling construction materials et cetera.

 In 2020, the value of the real estate industry was somewhere close to $300 to $400 billion. These details are somewhat old; at present, its volume is much greater than 400 Billion Dollars. Unofficial estimates declare it somewhat between 700-950 Billion dollars.

The Ministry of Commerce directed an overview as of late named ‘Study on the state of domestic commerce in Pakistan’. Here are the features of various findings in this review:

● Around 250 auxiliary businesses (for example concrete, steel, block, lumber, and building materials) are directly dependent on the real estate sector.

● Including all contemporary businesses, this sector is the second biggest employer in Pakistan after the husbandry and agriculture sector.

● Pakistanis disburse almost 5.2 billion dollars on development in a year

● The real estate market size in Pakistan is $700 billion (head of the examination at BMA Capital)

● The real estate industry represents 1.5-multiple times of Pakistan's GDP

Why is it the right time to invest in Pakistani real estate

Less demand after covid

Unprecedented Covid-19 pandemic decreased the investment volume in every sector. Spending and people's purchasing power is down all across the world.

As per the basic economics rule, less demand led to a decrease in the prices of real estate. Gradually, price hike trends are emerging in the industry but still, prices are low compared to the boom era of 6-7 years ago. Prices are expected to skyrocket in 2022 and the coming years.

Imran Khan’s real estate amnesty scheme

This scheme waived off several charges and taxes for the realty sector and also allowed people to invest their black money in the construction sector without disclosing their source of income. Tax on gains on investment has been waived for all citizens who would want to sell their home where previously Government of Pakistan charged 5% to 20% capital gains tax on the sale of constructed assets and open plots.

This limited-time concession package opened a dozen real estate investment opportunities in Pakistan for investors.

New projects with low prices

Lodging needs are always increasing in Pakistan. To accommodate people and fulfill their residential and commercial needs, more and more housing societies are being launched in the market. There are some very dandy projects recently launched including Nova City housing society Islamabad and Rudn Enclave Rawalpindi. These projects are currently in their launching phases offering residential and commercial properties at introductory prices. Generally, everyone is offering very easy installment plans after 10% down payments. Payment plans are designed in a way that even not very financially strong segments of the population can also afford to invest in these projects.

Nova City NOC and Rudn Enclave Rawalpindi NOC are under processing and the process is expected to be completed very soon. Once it is granted, prices will rise. Investing now in these emerging projects, one can earn good profits in both the long term as well as short term.

China Pak Economic Corridor (CPEC)

CPEC is a long route, covering Gwadar seaport, highways, railways, and pipelines in Pakistan.

CPEC is bringing fundamental changes in the real estate industry too. Just take the example of Rawalpindi and Islamabad. Across the eastern route of the project, multiple housing societies were recently launched. Just like that, real estate projects are also launched in Gawadar. The areas at the sides of the route are expected to be the new commercial hubs so properties are going to be very expensive in these areas.

Increase in the prices of gold

General masses of Pakistan invest in two major categories, Gold and Real Estate. Gold prices are touching the sky. Even just a Tola of gold is almost 1.5 lacs making an investment in real estate more feasible.

As investment in the sector will keep on increasing, prices will also increase, so investing now, one can benefit real soon in coming times.

Final Words

Pakistan is the best country for real estate investment.

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