Pakistan Real Estate is coming to light very quickly after the recent economic conditions as the Covid-19 and Locusts attack last year in Pakistan were quite intense. People like to invest in the Pakistan’s real estate market after saving up a little bit and to facilitate the real estate market in Pakistan. The government is trying really hard to make the future of real estate business in Pakistan an investment worthy venture.
Pakistan’s 2021 Real Estate Prospects, Forecast and Challenges
Due to the relaxation of taxes, property prices in Pakistan 2021 have decreased and are investment worthy. People who don’t have homes are buying their homes or residential plots to secure their future. Real Sector has become one of the major sectors of the Pakistani Economy in just a few months.
Due to the decrease in the prices, it is a wonderful opportunity for people with savings to invest more in real estate market. The consumers with savings are investing more and more at low rates to gain profit in the future at high rates. Due to this investment Pakistan real estate markets seems to be doing well. In this analysis of Pakistan’s Real Estate, we will discuss the
- Reasons to invest in Pakistani Real Estate Market
- Impact of Real Estate Market on Pakistan’s Economy
- Government efforts to improve Pakistani Real Estate Market
- Challenges for the Real Estate Market and the solutions
Reasons to Invest in Pakistani Real Estate Market
The Pakistan Real Estate Forecast 2021 seems to be going well as many other investment opportunities are being neglected due to their volatile nature. The Pakistan real estate forecast 2021 tells that it is going to be a year of boom for the real estate market due to many reasons. Some of the reasons that make real estate a desirable place to invest are discussed below:
Unstable prices of Gold:
Many people like to invest in Gold as it serves many purposes. But recently, Gold is facing a very unstable market. Its prices can rise up to $2000 per ounce to start drifting downwards very soon. This trend has chased away many investors as they think it is not the time for a secure and safe investment in gold. Their investment in turn is going into the Pakistan’s real estate market.
If you don’t have enough information about the shares, how to trade, or what the stock market as a whole, then it is suggested not to invest in the stock market. The market is very volatile and needs decisions in a few seconds whether to sell or buy more shares. This is not a secure and safe investment for many investors who are not willing to take excessive risks.
Due to this reason, many people have sold their shares to invest in the real estate market of Pakistan.
Huge reduction in property tax for 2021:
The government of Pakistan has lowered the interest rate and announced incentives for the investors and businessmen to mitigate the economic impact of the pandemic. It’s a relief package for the construction industry with the twofold aim of providing employment to daily wage earners, and spurring economic activity.
The package also includes additional incentives for builders and developers to build low-cost housing for the poor under the Naya Pakistan Housing Program. The tax rate will be fixed for the construction and the withholding tax will be waived off.
We can understand this fact by learning that cement dispatches in the first half of the 2021 financial year were 29M tons, up by 16% year-on-year from 25M tons in the first half of the 2020 financial year.
Impact of Real Estate Market on Pakistan’s Economy
The real estate market of Pakistan supports the economy of Pakistan to a large extent. Not only Pakistani investors see the potential in this market but the foreign investors are also fascinated and want to invest here.
One of the many main reasons for investment of foreign investors in Pakistani real estate is the stability in the social conditions of Pakistan and the safe environment. This was not the case a decade ago as the environment became very dangerous and people feared the unstable and volatile nature of political and economic environments.
Influence of CPEC on Pakistan’s Real Estate Market and Pakistan’s economy:
From the start of CPEC, the economic conditions of Pakistan have started to become better. CPEC has turned out to be a pioneer of transformational change in Pakistan’s economy. It has transformed the real estate industry too since it has connected Gwadar seaport to Kashgar located in China. This one link will serve as a trade route for both bordering countries.
Owing to the enormous success of CPEC, Pakistan’s real estate market has definitely grasped the attention of investors, keen to look for an investment opportunity from all over the world. Due to this trend, there has been a notable rise in real estate projects and the prices are also increasing.
Economic growth is crucial in the real estate business. Economic growth is associated with the increasing prices of real estate. Due to CPEC, job opportunities will increase, and thus, the need for people buying or renting places near Gwadar will also increase. This will boost the real estate business.
CPEC is a joint economic venture between China and Pakistan, and therefore, many engineers are required from both the countries in order that they can be deployed in Gwadar to complete the project.
Accommodating engineers and other workers require the establishment of several small cities, towns, and mini-projects along the belt. This is great news for the real estate market.
The land of Gwadar can be used to build multiple housing societies with all the amenities. The Chinese entrance has greatly influenced rental returns in major cities and it is undeniably true that with time, this influx will increase.
The impact of Chinese immigrants can be seen in many societies of Pakistan. Blue world city is a housing society built in collaboration with Chinese engineers and architects who have designed the houses and apartments so that people can experience luxury and a lavish lifestyle.
When the trade route is going to be completely established between Pakistan and China, then the requirement for proper road infrastructure also will arise. Road infrastructure increases the value of places that are around it. This will in turn influence the real estate market because the prices of homes, plots, and even rental apartments will increase.
Most societies are located on the outskirts of the major cities like Bahria Town and DHA in Lahore, Karachi, Multan, Islamabad etc. which can easily be connected to the CPEC. The CPEC has a great hand in raising the prices of properties in these. The plot of 1 Kanal of PKR 1,000,000 can be easily converted into PKR 5,000,000 after being part of these societies.
It is contemplated that within the next twenty years, the population of Gwadar will rise to more than three million. So, in this respect, CPEC will become a necessity to cater to all the wants of the increased population. Gwadar City will be established in a gated community that will provide residential, commercial, entertainment, cultural, and educational environments under one roof. It should be noted that more than 50% of the area is set aside for open spaces.
Owing to the increase in the development in Gwadar, many schools, shopping malls, and hospitals are assumed to be built in the city. More than 1500 homes are going to be built across a locality of 3.5 million sq. ft. Moreover, with many immigrants arriving at Gwadar port, the worth of land will rise. This will, in turn, promote the real estate market.
In short, we can see that the Pakistan’s Real Estate Forecast 2021 suggests investing more in this market promises a huge profit in the coming future. The investors should purchase the properties at a low rate so that they can earn more by selling it once the rates are good enough.
Government Efforts to Improve Pakistani Real Estate Market:
The Prime Minister of Pakistan, Imran Khan has made many efforts to improve Pakistan’s real estate sector that can easily uplift Pakistan’s Economy. For this reason, he has lowered the interest rate for the sector and announced many incentives for the investors and businessmen to moderate the economic impact of the pandemic. It’s a relief package for the whole Real Estate Market and its related industries with the double aim of providing employment to daily wage earners, and spurring economic activity for putting Pakistan’s Economy back on its track.
- These changes are implemented
- To inflate the government tax revenues and
- Intercept speculative purchases in the real estate market
Challenges for the Real Estate Market and the Solution:
The real estate market has been overhauled by illiterate brokers and dealers without the expertise to lead the potential clients. Many of these cases have also resulted in frauds and scams where clients have lost their savings.
A regulatory body is required as there is no law present to limit the boundaries of the so-called brokers and dealers on a federal and provincial level. People who want to invest in the real estate market should evaluate the project thoroughly or consult reliable and renowned agents like Pakistan Property Services to help them in their investment.
Many developers deliver the real estate projects very late after the initial promised date. The construction process is very slow and creates a lot of hassles in the meantime for the investors. The overseas investors are being scammed a lot of their hard-earned wealth by the fraud developers as they are shown a positive image of the projects and good impacts on the environment but there is nothing like that in reality. The developers of the residential societies forget the maintenance once after the society gets developed. There should be a proper check and balance to overcome these challenges.
The government needs to build long-term tax policies that don’t tax the already tax-paying population of Pakistan. Taxing the taxpayers will be harmful to the Pakistani Economy in many ways such as
- People won’t use the online transaction system for the transactions and start using the cash to hide their wealth and lead to reduced taxes
- Investors will invest their money outside the country to buy assets in foreign countries and invest money in offshore companies.
- Increase in taxes can also have a negative impact on the economy and many unemployment increases
A progressive and continuous approach is required to bring reforms in the system for positive impacts on both the real estate market and the Pakistani Economy.
Pakistan Property Services-A Reliable Name in Real Estate Sector:
Pakistan Property Services evaluates the potential of the real estate projects for its clients in Pakistan and regularly updates them about the ongoing or New Trends, new projects and the potential of the old projects that can benefit them lot.
Projects of Bahria Town Lahore’s sectors, Bahria Orchard Lahore, Bahria Town Karachi (Bahria Homes, Bahria Paradise, Bahria Paradise Villas, Iqbal Villas, Quaid Villas, Bahria Sports City, Bahria Sports Villas, different precincts, Bahria Farm Houses, Bahria Golf City, Bahria Heights, Bahria Apartments), DHA in all cities of Pakistan, many residential and commercial societies in Pakistan are evaluated carefully to help our clients make the most better decision.
Pakistan Property Services helps the clients invest in projects with good prospects that depend upon the parent company, developers, location, payment plan, amenities they can have in the desired project.