The real estate industry is one of the major and growing industry in Pakistan. Pakistan spends about US$5.2 billion on construction and infrastructure, which leads to a major growth in Pakistan’s real estate market. Despite the improvement, we still see that many people in Pakistan still lack basic living necessities like housing. Therefore, it clearly shows that the real estate market has room for growth and improvement so that the people from all sources of income can meet the basic needs of life easily.
The current government insisted that the budget should be tax-free, although the opposition rejected the budget on the grounds that it could not cope with the financial crisis.
Real Estate after the Coronavirus Outbreak:
In the last two months of 2020, prices of property have been stabilized. However, the Government of Pakistan has declared that they would be continuing the construction relief package in 2021 starting from 31st December 2020. An announcement about the continual construction relief package brought back the positive rhythm, hence increasing the prices of the property once again. But the prices of properties are showing highly speculative behavior so one should invest very carefully.
The construction relief package by the government is focusing mainly on development and construction. Still, the plotting sector also got quite a share, which includes the non-possession plots as well. Many societies have started developing non-possession plots and have announced possession so that investors can quickly start the construction of their projects/homes.
A New Hope for Real Estate in Pakistan:
The concept of “Europe is a safe-haven” died, and immigrants will now try to buy properties in Pakistan. Indeed, Pakistan is not safe from this epidemic and there are no facilities like Europe, then why would the migrants prefer Pakistan to Europe? Because it is our human nature to get homesick when times get tough because you feel secure when you are living in your hometown. The same kind of situation arose after the incident of 9/11, Pakistanis abroad began to buy real estate in their home country. And, it’s going to happen once again in the Covid-19 outbreak.
Since the global epidemic has forced the world to stay inside their homes, there is no doubt that this epidemic has proved to be very devastating for the global economy, the damage so far While it is still huge, no one can say for sure when the crisis will end and when normal business and trade activities will resume in the world, so how much the epidemic will hit the world economy is still unknown. It is not possible to estimate. However, a glimmer of hope and optimism can emerge from within this catastrophic situation for Pakistan’s real estate sector, which is that there could be huge investments in the real estate sector by Pakistanis abroad.
Given that the global pandemic has locked the entire world inside their homes, there is no doubt that this pandemic is very destructive to the global economy. The damage so far is still huge, but no one can be sure when the crisis will end and normal business and commercial activities will resume in time, so the impact of the epidemic on the world economy is still unknown. However, even in this disastrous situation, Pakistan’s real estate industry may bring a glimmer of hope and optimism. Because it’s a possibility that Pakistanis living abroad may invest heavily in Pakistan’s real estate.
Why Invest in Real Estate Market of Pakistan?
Due to the unstable nature of other investment opportunities, they are being neglected right now. The Pakistan real estate forecast for 2021 seems to be a ray of hope as it seems like it is going to be a year of boom for the real estate market due to many reasons. Some of the reasons that make the real estate market of Pakistan a desirable place to invest are discussed below:
Stock Markets:
If you do not have sufficient knowledge of stocks, how to trade them, or the overall situation of the stock market, it is recommended not to invest in the stock market. The market is very risky and unstable and you need to decide within a few seconds whether to sell or buy more stocks. For many investors who are unwilling to take excessive risks, this is not a safe investment, which is why many people sell their stocks to invest in the Pakistani real estate market.
Unstable Gold Prices:
What usually happens is that people like to invest in gold because it has many uses. But recently, gold is facing a very turbulent market. Their price may be as high as $2,000 per ounce and will soon start to fall. This trend has scared off many investors because they believe that now is not the time to invest in gold safely. In turn, your investment will flow to Pakistan’s real estate market.
Property Tax Reduction in 2021 Budget:
Pakistani government lowered interest rates and has announced an aid package and incentives for the investors, entrepreneurs, and construction industry to reduce the impact of the pandemic on the economy. Its dual goal is to provide employment opportunities for daily wage workers and stimulate 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 for the construction industry has been set, and the withholding tax has been abolished. We can get the idea by knowing that cement shipments in the first half of 2021 will be 29 million tons, a year-on-year increase of 16%. Production in the first half of the fiscal year 2020 was 25 million tons.
Real Estate Market and Pakistan’s Economy:
The Pakistani real estate market supports the Pakistani economy to a large extent. Not only do Pakistani investors see the potential of this market, but foreign investors are also fascinated and want to invest here. One of the many main reasons for foreign investors to invest in Pakistan’s real estate is the stability of Pakistan’s social conditions and environmental safety. This was not the case ten years ago, because the environment has become very dangerous, and people are worried about the instability and volatility of the political and economic environment.
Efforts by Government of Pakistan:
Prime Minister Imran Khan took a lot of steps to improve Pakistan’s real estate industry so that it can easily promote Pakistan’s economy. For instance, he lowered interest rates in the industry and announced many incentives for investors and entrepreneurs to reduce the impact of the pandemic on the economy. This is a package of assistance for the entire real estate market and related industries. It will also provide employment opportunities for daily-paid workers and stimulate economic activities so that the Pakistani economy can get back on track.
