Real Estate Market Situation in Pakistan
Real Estate market in Pakistan is showing a downward trend for a few years now. Once a very lucrative option for investors is practically stagnant now. Many businesses attached to Real Estate Market have either closed down or are at the brink of getting bankrupt.
If you see the property investment analysis, reports, and trends, the current market figures don’t reflect the ground reality. The real estate business was a major part of the country’s informal economy. This market constituted a huge portion of the unreported gains, mainly due to low regulatory control and that’s why the theoretical impact is not showing the real picture.
There are many new projects in the market but investors are reluctant to invest mainly due to tax reforms introduced by the current regime.
Where is the Government failing?
In my opinion, Real Estate is one area where the current government is not fully focused. To start with, the tax reforms should have been done in stages rather than all at once. Government officials’ counter-response on this point is that these reforms were inevitable. Firstly to avoid falling in the FATF blacklist and secondly to meet IMF loan conditions.
There is no doubt about the involvement of black money in the Real Estate market. It was a haven for money launderers. The low regulatory control of the property market made it easy for individuals to conceal their wealth and sources of income, as well as minimize their tax liabilities but FBR’s aggressive drive has created doubts in the mind of genuine investors as well. The idea was right, but the method was awfully wrong.
To counter that, the Government should introduce some initiatives for investors and especially for overseas Pakistanis to Invest without any fear of getting unfair treatment from authorities.
Also Read: Is Pakistan stock market performing well?
What is Need of the Need of the Hour?
Clear guidelines are needed at this stage and the government must make sure that they are implemented on the ground. This is a very important step to bring back investors’ trust and confidence. Similarly, the house finance offering needs to be simplified, available, and affordable to low income earning class. Currently, the mortgage market is almost a non-existing concept in Pakistan
Apart from the tax reform drive, the legal issue related to one of the largest residential projects, Bahria Town in Karachi. That had a very negative impact on regular investors in Real Estate. The ruling created a lot of panic in people, especially in overseas Pakistanis. No objection to the ruling but why the authorities act after the societies are developed? Why they didn’t take notice of such issues at the time when developers are giving possessions? These are a few questions that need to be answered by all authorities. The regulatory authority must do all checks before the development of any real estate to ensure that land ownership cannot be challenged once the society is developed
Bahria Town Importance in Real Estate
Apart from the legal issues that Bahria town is facing, it has created some of the best planned residential societies in Pakistan. Irrespective of construction quality, the planning is always of international standards. Bahria town has created a benchmark for local competitors. We are now noticing the trend of similar planning in other projects too.
There is another project known as Capital Smart city in Islamabad that has potential and a promising future in Pakistan Real Estate Sector. A renowned construction group Habib Rafique limited HRL is developing this modern city. It is a high-end project but worth exploring for investors and potential buyers. The main reason for its success in such a short period is because of the reliable name of HRL and the pace of groundwork that has been done. The city’s planning is very advance and according to international standards.
In a nutshell, the government needs to shift its focus toward the real estate industry as soon as we are done with this Pandemic situation. It must ease conditions for real estate investors. After all, Real Estate is a big market and multiple industries are connected with it. The revival of this industry will have a positive impact on the overall economy and will help in job creation.
Video conferencing is a great way to have face-to-face meetings with clients and colleagues worldwide
It is all too easy to fall into the trap of becoming used to something
With advancing technology and circumstances that require learning from home, online education has grown significantly
Apple’s new iPhone 12 Pro added the LiDAR Scanner to its long list of innovative