Introduction
Over the past decade, rapid population expansion in Pakistan has resulted in a surge in demand for urban amenities, including shopping malls, movie theatres, and other entertainment centres. We can’t overstate the real estate industry’s importance in expanding our economy. Given that real estate holdings account for between 60 and 70 per cent of the country’s economy, and the construction industry is responsible for up to Rs 380 billion in GDP, it is clear that this industry is vital to Pakistan’s economic growth and development.
Real Estate Sector In Pakistan
The real estate industry is the second-largest employer, behind agriculture. Investing in real estate is famous worldwide, and Pakistan is no exception. It is because it is a scarce resource in high demand, giving the item its value. Therefore, the most urgent requirement is for the real estate industry to grow through creative problem-solving.
History Of The Real Estate Sector
Throughout history, the country’s real estate industry got going after Pakistan gained its independence from Britain. The government has first prioritized Karachi due to its status as the country’s commercial centre and a significant hub for migrants entering from India. Due to the high demand for homes and businesses, construction in Karachi has exploded in recent years. DHA was founded in Karachi in the 1950s, whereas the original DHA location was in Punjab, Lahore, in the 1970s.
When comparing early real estate developments among cities, one can also consider the range of urbanization and economic growth. Rapid urbanization occurred due to modernization and the appeal of new job opportunities, which prompted people to move from the countryside to the metropolis.
Rising remittances to Pakistan also affect the country’s rising property values. According to the most current economic assessment, Pakistan is in the top 10 countries that receive remittances. In addition, the country boasts the world’s sixth-largest diaspora, significantly impacting the rising demand for housing.
Read more about Park View City Islamabad
Importance Of The Expansion Of The Real Estate Sector
According to the World Bank’s analysis, the value of the property market rises in tandem with the influx of FDI. This sector encourages related industries such as lumber, cement, sanitary, steel, furniture, etc.
Real estate is a significant economic factor in Pakistan. However, Pakistan spends $5.2 billion yearly on construction activities, more money to purchase dwelling and business plots (about 2% of GDP) than on construction. As shown by the FPCCI’s numbers and figures, real estate brokers play a significant role in Pakistan’s economic growth. A sharp uptick in demand in 2010 attracted developers and builders to Pakistan’s housing market.
Challenges In Pakistan Real Estate Sector
However, according to the World Bank, Pakistan has suffered from a severe lack of housing: a shortfall of 10 million dwellings. As a result, many firms in Pakistan’s real estate industry has currently engaged in an active period of development aimed at introducing novel approaches and methods to enhance services and lessen the prevalence of malpractices.
Incorrect property pricing, slow procedures, an absence of information, unregistered taxpayers, a lack of legitimate property listing platforms, etc., are only some of the problems the real estate industry faces because of inadequate regulation.
Solution of Challenges
There is an increase in fraudulent activities around purchasing and selling land. The adoption of technology can assist in curbing this trend. In addition to the current momentum, the industry will benefit from technologies like Web 3.0.
Data analytics and digitalization will reduce fraud and deception in the real estate industry. Prop technology has been used in the developed world, allowing for solid property investment and technology integration. Artificial intelligence (AI), machine learning (ML), virtual reality (VR), the Internet of Things (IoT), and cutting-edge, Smart home equipment are all part of the properties in the area.
Development Of The Real Estate Sector
Because of rising demand, the construction of new homes has become a booming industry. As a result, Pakistani real estate trends are changing more rapidly than in recent years. That is because of both need and possible increases in the expanding human population. As a result, numerous real estate opportunities have emerged in Pakistan. Buying a house is far less hassle than it used to be. Innumerable people in Pakistan are open to investing in the real estate market because of the rising homeownership rate there. People want to own their homes rather than rent them.
As knowledge about home ownership spreads, more and more people set their sights on becoming homeowners. In addition, the government has promoted the idea of vertical cities as a means to achieve sustainable urban growth, which is a priority for the country. The goal is to build tall structures that protect the environment and better use limited real estate in dense urban settings.
Well-planned housing cooperatives that offer luxurious amenities at affordable prices and promote sustainable lifestyles. The prime examples of the new wave of real estate development in Pakistan are
- The Rudn Enclave Islamabad
- Capital Smart City
- Blue World City
- Park View City
- Kingdom Valley
Pakistan Real Estate Sector in 2022
Despite the maximum inflation rates in 2022, demand for real estate in Pakistan soared. According to financial experts, Sixty-four per cent of young Pakistanis want to make a lot of money (ROI). Therefore, more dwellings are needed to accommodate the growing population. As a result, the Economic Survey of Pakistan reported Rs 34.6 billion (US$212.7 million) earmarked for the construction and development sector in the 2021-2022 Budget.
Pakistan Real Estate Sector in 2023
It will have anticipated that 2023 will be a watershed year for the real estate market as a significant economic rebound will further emphasize the sector’s expansion. The value of both business and residential property in Pakistan has been rising steadily, leading experts to predict that fresh investments will have made in the market in 2023.
Including state-of-the-art technology in building construction has been shown to boost productivity and the economy. The Government Development Authorities report that renowned developers will have established 8,767 new residential societies throughout Pakistan’s recent decade. But unfortunately, only 2,767 housing cooperatives can call themselves legitimate. These housing cooperatives’ market value is between 15 and 20 trillion rupees.
Read more about Rudn Enclave
New Real Estate Taxation in Pakistan
The Pakistani government has increased the allowable withholding tax from One per cent to Two per cent for filers and from two per cent to five per cent for non-filers. Because of this endeavour, the construction and housing industries will not grow as much in 2023 as they would have.
Conclusion
According to industry insiders, Pakistan’s real estate market will reach new heights of success by 2023. Market growth for both business and residential properties is causing prices to rise despite real estate’s excellent investment return. Therefore, the real estate market in Pakistan and the year 2023 look promising. More importantly, whenever it comes to money, there is no other industry as reliable as real estate.
