Pakistan has a swinging economy with many ups and downs, with most of its time in the recession phase because of the political situation in Pakistan. Besides the agricultural sector’s contribution, the real estate market in Pakistan contributes a lot to Pakistan’s GDP. In this blog, we will deal with the current situation of the real estate market and analyze it in depth for challenges and opportunities.
We will start with the size and growth of the real estate market in Pakistan to give you an insight into its future aspects and success. Later on, we will discuss why this sector sometimes faces problems and why, despite all those challenges, it’s uplifting.
The Size and Growth of The Real Estate Market in Pakistan
The real estate market is a fast-growing market in Pakistan, with an estimated contribution of 2% to the country’s GDP in 2021. The sector’s annual growth rate was 4.2% from 2011 to 2019. However, in 2020, there was a decline in the growth rate due to the COVID-19 pandemic. According to analysis, the real estate market will continue to expand in 2023, making an approximate contribution of 2.6% toward the GDP of Pakistan.
A Careful Analysis of Real Estate Market Development Aligned with Pakistan’s Political Situation
Throughout the history of Pakistan, it has been going through ups and downs due to the economic and political situation there. The economic development of every country is tightly linked to its political development and policies. Unfortunately, Pakistan is always ruled by politicians who merely focus on their motives and ignore the overall national goals. Due to this, Pakistan still needs to catch up in terms of its economy and development. Whenever Pakistan is blessed with good administration, it is overthrown by a third party with international conspiracies.
The involvement of a third party, either its international agents or Pakistan’s establishment, is the main reason behind Pakistan’s political instability, which in turn leads to economic recession, inflation, and unemployment in Pakistan. The main reasons behind the interference of international agencies in the internal affairs of Pakistan are its strong Geostrategic location, nuclear power, and mineral wealth. The involvement of Pakistan’s establishment and Army in the political affairs of Pakistan is due to their controlling nature, which allows them to take hold of every government department and guide them according to their will. These two interferences have deeply affected Pakistan’s economic and political development.
The former government of Pakistan, with Imran Khan as Prime Minister, was bringing some positive changes to Pakistan’s policies to boost all national and international businesses in Pakistan. Despite the positive performance, the government was illegally removed due to an international conspiracy, bringing Pakistan back to its knees.
The government of Imran Khan was inclined toward the well-being of the commoners and daily wagers. So he developed policies that helped the common man earn a living. He introduced policies for businesses that would empower the people of his country. He knew that businesses were employment for his people, and if he strengthened them, he would indirectly make his people strong. In context with the COVID-19 pandemic, he passed an order to continue activities in the real estate market as it provides daily wagers with consistent opportunities to earn. The PM announced a fixed tax rate for the construction sector and provided a subsidy of 30 billion Rupees for its progress and development.
Moreover, he initiated the Naya Pakistan Housing Scheme and invited real estate investors to this scheme by waiving off 90% of taxes. He removed withholding tax from all construction materials to create ease for developers. Besides these policies, there are hundreds of incentives taken by PTI’s government for developing the real estate market in Pakistan. After the removal of Prime Minister Imran Khan from his office, Pakistan faced a backlash regarding its economic development, leading to severe inflation and unemployment.
In the coming few months, Pakistan will conduct a general election, and we are hoping that free and fair elections will bring back a party and government that will help businesses grow and prosper. Fingers crossed, and I hope for the best for Pakistan and its people!
By going through this section of the blog, you have gained enough knowledge of the reasons behind the ups and downs in the real estate market in Pakistan. In the coming section, we will discuss the opportunities and upcoming projects in the real estate market.
Current Trends in the Real Estate Market in Pakistan
The real estate market in Pakistan is currently experiencing several trends, including:
- Increase in Demand for Residential Properties: The population of Pakistan is growing at a rapid rate, and to grab the opportunities linked with major cities of Pakistan, there is increased urbanization, leading to a rise in the demand for residential properties.
- Rise in Commercial Real Estate Investments: As government knows the importance of the real estate market for the development of Pakistan, several policies have been devised to attract foreign and local investors. As a result, there has been an increase in commercial real estate investment.
- Growth of Smart Cities: The government of Pakistan has launched several smart city projects to attract local and foreign investors in the real estate market.
- Increase in Property Prices: Due to severe inflation and unemployment, it’s difficult for middle-class buyers to afford homes and properties.
Challenges in the Real Estate Market in Pakistan
The real estate market in Pakistan faces several challenges, including:
- Lack of Proper Regulations: The real estate market in Pakistan lacks proper regulation, leading to the creation of loopholes for fraud and malpractice.
- Limited Financial Support: In Pakistan, the general population doesn’t have access to easy loans for investment in the real estate sector, limiting their ability to invest in the real estate market.
- Political Instability: As discussed above, political instability is the main reason behind all the problems related to the development of Pakistan and the real estate market.
Upcoming Real Estate Projects in Pakistan in 2023
With the start of 2023, Pakistan has initiated many real estate projects, especially in big cities.
- In Karachi, there are several housing projects like Bahria Town Karachi, the largest ongoing real estate project in the country, offering a world-class experience to its residents.
- In Islamabad, housing societies like Blue World City Islamabad, Park View City Islamabad, Capital Smart City Islamabad, and Moreno Enclave Islamabad are in full swing.
- In Lahore, projects like Mid City Housing Lahore, Lake City, DHA Lahore Phase 13, Park View City Lahore, and Capital Smart City Lahore are in the development phase.
- In Rawalpindi, Projects like DHA Rawalpindi Phase 4 and Bahria Town Rawalpindi Phase 9 Extension attract foreign and local investors.
- In Nathia Gali, Zen Apartment, one of the world-class projects surrounded by greenery and serene mountains, is in a speedy development phase.
In conclusion, Pakistan is a developing market for businesses worldwide. Presently, the real estate market is making a lofty contribution to the GDP of Pakistan. Still, many challenges are faced by Pakistan’s real estate sector, including the political situation. Even though there are many hurdles, our real estate marketing is in full swing. We are hopeful that the coming government of Pakistan will bring some positive changes and good policies in the developmental sector.