FUTURE OF REAL ESTATE IN PAKISTAN

The financial crunch of 2008 has badly affected almost every country on the globe. The whole world witnessed the collapse of Dubai economy as the financial crisis hit it. But fortunately Pakistan, being a developing country did not take much affect from the crisis. Experts believe that this was either due to stagnant property prices in Pakistan for the last six years or due to the fact that economy of Pakistan did not depend on real estate sector, until 2008.

However Pakistan’s real estate industry is currently in the booming phase. The prices have skyrocketed and are expected to rise further in future. But what will be the future of real estate sector in Pakistan in the next few years? How the changing economy and country’s situations are going to impact it?

What Future Hold For Pakistan’s Real Estate Industry?

The contribution of construction sector of Pakistan has slashed down in 2009 from 28% to mere 4%. The developers are pessimistic and are reluctant to begin new projects due to short supply of gas and electricity. But the people of Pakistan have mixed views about the current performance of Pakistan’s real estate, the industry experts and Pakistani realtors are optimistic about the future of real estate market because Government of Pakistan is now vigilant in fixing the problems real estate sector as soon as possible.

Impact of Law and Order Situation

With the government measures to eradicate terrorism and its efforts to contain violence in the country, it is expected that the prevailing law and order of the country will soon improve in the near future. It will build trust among the citizens of Pakistan and other investors and would encourage them to invest in real estate properties. This is likely to stir life in the real estate sector of the country, which was once a spectacular one in contributing to the GDP.

Rising Interest Rate

Due to inflation prevalent in the country, the prices of properties have skyrocketed. The increase in price of basic commodities has badly affected the purchasing power of buyers and they tend to save more than spend. Despite in its flourishing stage, most of the people are reluctant in investing in real estate properties which has jammed the realty sector to quite an extent. Although State Bank of Pakistan had decreased the interest rate from 14% to 13% in 2011, yet the new government has reversed the process. The interest rates are rising continually further decreasing the buying power of local people. If government does not intend to take measures in resolving the issue of hefty interest rate, it is likely that the real estate industry will be thrown back into its dark ages with lapse of time. Only diminishing the disparity between demand and supply can bring Pakistan’s real estate sector back on track.

Hope for Good

On the other hand buyers should also be aware of the fact that the prices cannot stay high for an indefinite time period. All the investors out there are not actual buyers and they don’t intend to invest for longer terms. Thus it is not wrong to hope for a brighter future for realty sector and expect a reversal for the current trends.

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About Author

Aujala Marrium is a freelance blogger and she has been writing informative articles and reviews for a few years online and she especially likes to write on marketing, investments and real estate. Follow her on Google +.