Pakistan Real Estate Market Synopsis for the Last Decade and Outlook for the Next Decade
After promulgating amendments in the 2001 Income Tax Ordinance, more than 85% of the real estate developer has stopped construction engineering for their ongoing projects in Pakistan. The real estate sector in Pakistan has tremendous potential to grow and a fast pace, but obstacles, unfair taxes, and bureaucratic hurdles hamper its growth drastically. The real estate sector and builders' and developers' importance are undeniable in a country's lifting economy.
According to statistics, Pakistan's real estate construction work spends more than 2% of its Gross Domestic Product that accumulates roughly more than $5.1 billion. Choking resources and lack of infrastructure in tackling internal mass migration in search of better living and earning opportunities requires careful urban planning and researched the real estate market usage.
Pakistan's real estate market mainly comprises residential, commercial, agricultural, and industrial properties. After 9/11, a massive influx of money created an enormous jump in Pakistan's major cities' residential and commercial properties. The start of the 21st century also witnessed some tycoons entering into developing housing schemes for upscale people. Many immigrants at that time knowingly migrated back to their home country Pakistan. But many ex-pats left their hard-earned money on federal agencies' biased discretion as those hot pursuits of money trails and facilitators of the Afghan Taliban and Bin Laden.
The ongoing investigations range was broad, and bank accounts were searched vigorously to find out clues from were big chunks of money laundered back to Pakistan. And agencies in the U.S. were also questioning the account holders about their businesses. This chaotic and uncertain future in the U.S. resulted in millions and millions of dollars landing in Pakistan. Both the real estate marketplace and the stock market witnessed a phenomenal increase.
Where commercial and residential and even agricultural and industrial land prices went too high to record historical highs, the demand for land, no matter what the type was, too high. The euphoria was so intense that the mafia created file-based corruption where only files were exchanged no actual transaction took place; that bubble burst in 2005 and 2006, where both the real estate market and equity market touched their lows. The global economy suffered a dent due to the credit crisis in the U.S. Most of the developed economies battered by this, and the world started seeing recession that soon engulfed Asian economies, and Pakistan was no exception. Slowed growth and less consumer demand led by a series of Middle Eastern rebellions and a drastic decrease in crude oil prices.
Then, back in 2013, the U.S. economy showed recovery symbols, and slowly the economy was back on track. In Pakistan, new elections were held, and a democratic government led by Nawaz Sharif was formed.
Fluctuating trends have been observed in Pakistan's real estate market in the past few years. In the last four years, from 2013 to 2017, a bullish trend has been observed. Still, since the PTI government has taken charge of real estate in Pakistan, it is continuously facing a downward trend in property value, and the volume of transactions taking place has been reduced to an alarming low.
Current Plight of Real Estate Sector
Pakistan's real estate market is continuously deteriorating, and a fall in property prices is evident in almost all major cities and areas. The property dealings are reported to be record low at present. The effects of amendments in Income Tax Ordinance-2001 connected with property valuation are becoming visible, and mostly as the third quarter has ended, they are getting widespread. The demand in the real estate market is continually fading, and people are merely wondering with no intention to invest, thereby sparking a collapse in the real estate market.
COVID 19 played a vital role in the economic slowdown of the whole world, especially in developing countries like Pakistan. Currently, 2nd wave is believed to be more lethal fast spread with the start of the coming winter season. The PTI government is getting weaker and weaker with each passing day, businesses are down across the board, and Naya Pakistan's dream is fast fading. Opposition parties have united to bring down Imran Khan’s current regime as inflations have risen, the Pak rupee has lost its value to 165 against a US$.
Big investors are liquidating their portfolio in the stock market in anticipation that the market will soon come down due to political chaos and uncertainty, an alarming situation on eastern borders with India. Pundits forecast that there might be a chance of the current democratic system systematic failures to curb corruption, inability to bring back looted money by earlier governments, and punish those who did all the wrongdoings.
Forecast for Real Estate Sector in Next Decade
RealProperty foresees that a strong presidential system might be the best option. And our current prime minister is looking for options and would get due to inherent secretive power that rule of law and justice must prevail at any cost and the corrupt people must be punished.
We at RealProperty.pk see a very bright future of Pakistan. Its real estate and the capital market would touch the new highest RealProperty.pk is the most trusted and authentic portal for hot properties for sale and for rent listings in Rawalpindi, Lahore, and Karachi.
We hope that Pakistan would be out of the woods in the coming Financial Action Task Force (FATF) plenary meeting later this month, as the country has met most high-priority demands already, and Pakistan would be excluded from the Grey List.
RealProperty.pk sees Pakistan's very bright future and urges investors and everyone to grab properties for sale in Lahore, Rawalpindi, Islamabad, and Karachi at top locations. And this could be a once in a blue moon opportunity to get the highest ROI in the shortest time in Real estate history in Pakistan.
Keeping in view One Belt and One Road initiative by China and Pakistan is playing a pivotal role in the practical implementation of this project. Pakistan has now seen its long term implications, and would be the Next hub of Chinese multi-trillion investments due to the liquidation of real estate assets in the U.S. and Treasury Bills disinvestment.
