Real estate has always been a driving factor in the development of the economy as it stimulates various other industries like construction, ceramic, cement, steel and services, to name a few. On the contrary, real estate is rather considered a precious asset to hold the savings in our country.
It is not that nobody ever considered real estate as a catalyst for development, almost every other government planned to achieve development targets with the help of real estate. But why hasn’t any administration been successful in this regard, while our neighbor China has overcome poverty after investing heavily in the construction?
There are endless reasons as to why every attempt to enhance construction and develop real estate has failed in the past. Consequently, investors don’t favor real estate for growth and business progress. However, things are getting better in recent times for the sector, and people associated with real estate are hopeful for positive outcomes this time.
Future of Real Estate in Pakistan is Looking Bright
Before we discuss why it is the best time to invest in property in Pakistan, we will first look at the main factors of slow real estate progress in the past.
- One of the major reasons behind slow real estate progress has been the conventional real estate model. Planned and industrialized development in the real estate sector has never been achieved.
- Financial institutions are kept out of financing real estate projects by not providing them with proper rules and regulations to enforce their policies.
- Planned housing has not been a priority for Pakistani customers as they preferred constructing houses at their existing place inside populated areas.
- The country lost the opportunity when there was a massive need of housing for afghan refugees. Their planned rehabilitation like modern housing, employment etc. would have paved the way for immigrants from other neighboring countries.
- Tax evasion is also a major hindrance in the path of development in any sector. People with black money do not wish to invest in projects that involve proper paperwork as it will require them to provide a money trail of their wealth.
- Crippled infrastructure ranging from dilapidated power distribution systems to broken road networks in almost all over the country restricted investors from investing in real estate.
These were some of the reasons behind slow development in the real estate sector in the country. So what has changed now for the real estate sector and why the investors are positive about real estate growth this time around?
The Right Time to Invest in Property in Pakistan is 2021:
Coronavirus pandemic slowed down the global economy. At one point during last year, when almost all the nations across the globe went under strict lockdown, another economic recession seemed inevitable. When all other countries were struggling to handle the covid-19 infection, Pakistan acted maturely and got the virus under control which is why the positive cases and deaths due to coronavirus were much lower than many developed countries like the US, Italy, Spain to name a few.
Imran Khan’s Policy & Relief for the Real Estate Sector
Just like tackling the covid-19 as a health emergency, the Pakistan government acted swiftly to provide the needed support to the economy. As per the vision and guidance of Prime Minister Imran Khan, different ministries along with state departments, came together to enhance economic activities in the country through real estate.
The main reason to do this was to discourage investors from keeping money in bank accounts. The government then announced that the framework for low rate housing finance had been finalized and banks started to roll out cheap loans for first-time house owners.
This provides an opportunity for salaried and small business class to construct or own a house which was a lifetime dream for them before this. The scheme is allowing them to build houses on their own plot, buy plots for house construction or to buy a fully constructed house with a plot.
Markup rate for this scheme is set 4% to 6% for the first five years and +2% for the next five years.
When this deprived class gets their own home, the demand for housing units within countries will increase, and investors will see a huge potential and lucrative return on their investment in the real estate sector of the country.
Real estate investors from developed countries also turn toward countries with such initiatives because they offer huge growth.
This comes at a time when all the federal and provincial institutions, as well as SBP and commercial banks, are trying hard to curb corruption and to reduce black money.
Such a scheme is a golden opportunity for one with black money, so they will come towards real estate to empty their coffers. This will enhance the construction activity, which can then act as a trickle-down effect on the market.
Increased Demand in Real Estate Sector
The economic indicators for Pakistan are positive for the future. The economy is getting into shape again with the help of a stable current account and increased exports. All these factors will contribute to increased demand in the real estate sector, and early investors can expect a high return on their investment.
Government-owned mega projects like Ravi Riverfront Urban Development Project are also started and will contribute towards real estate growth.
When all other sectors are struggling due to coronavirus pandemic, real estate can provide you with much-needed opportunity to invest and earn a reasonable return.
Get into construction or try your luck in trading of real estate projects, be sure that you claim your share out this opportunity.