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Posted by admin in CPEC, Gwadar News, Naval Anchorage on October 17th, 2018
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Posted by admin in Real Estate Development Company, Real Estate Property Guide on July 17th, 2018
With no doubt, Real Estate is the most important sector of Pakistan’s economy. On average, Pakistan spends about $5.2 billion on construction projects on yearly basis. Apart from it, a huge amount of money is spent on buying commercial and residential plots in Pakistan and maybe this is the reason why real estate is considered as the most favorite tools of investment for locals in Pakistan.
The Pakistani people prefer to invest a major part of their saving in the real estate sector. The official reports, as that of offered by the FPCCI, suggest that the real estate agents play a major role in the economic stability and development of Pakistan. Due to such a massive potential, the government of Pakistan also pays special attention to the real estate sector and works on the development and facilitation of the sector, comprehensively.
Despite the value of real estate, commercial and residential properties are not documented in their actual market price. This is the reason why it is impossible to undertake and determine the real worth of the current market value in Pakistan. However, according to official data by FBR the real estate and construction on the whole account for approximately 2% of the net GDP of Pakistan.
Not only real estate has the potential to generate direct employment but it can also stimulate the demands in auxiliary sectors like steel, cement, paint, building, brick, consumer durables, building materials and other such.
An interesting fact about the real estate sector of Pakistan is that it has hit record lows and highs in past few years. Many experts believe and state that real estate in Pakistan is treated as a commodity and investors buy property in bulks and later on sell it on clear profits.
With the involvement of different business communities, Pakistan is becoming a preferred business and investment destination and is getting popular around the globe. It has overcome the major trade gaps that have weighed down the overall business environment in the last ten years or so. Despite so many limitations the business sector remained consistent and kept funding the economy. Now that the situations have changed, both international and local investors are gathering to invest in different sectors of the economy of Pakistan, among which the Real Estate is most prominent.
The CPED is also set to redefine the balance of power in the region and is opening up doors to innovative investment and business avenues in Pakistan. The Real Estate sector of Pakistan is witnessing a subtle growth and the country is struggling to deal with the lack of urban planning and the host of basic facilities to make sure that higher quality is maintained. The authorities are focused to ensure organized and well-planned housing societies that cater all the needs of the upper and middle class in Pakistan.
The newly introduced housing societies in Pakistan are keen to offer facilities that are well planned and serve all the basic necessities of life. There can be the difference in the standards of living of one housing society and that of the other by the Real Estate customers are expecting to be served with exceptional quality, high level of reliability and all kinds of basic facilities for life.
The same comes for the investors in the corporate sector as they expect to get maximum facilities to groom their business and to make a real-time return on investment for the business as well as the country.
Just like any other business sector, the Real Estate sector in Pakistan needs to make sure that the quality of product and services offered match the true value to the investment. The Real Estate industry in Pakistan is also looking forward to turning the competition and lead the sector into appreciative and healthy reforms. It is necessary for the Real Estate sector to encourage the fresh investors and to offer affordability and quality.
The experts believe that focus on the quality of living and services to the Real Estate market investors will give the Real Estate sector of Pakistan a clear boost. The Real Estate in Pakistan has a massive potential to contribute to the GDB and can also play a major role in broadening the economy of Pakistan.
With the inception and success of the idea of CPEC in Pakistan, there are more and more foreign investors who are looking forward to investing in Pakistan. The Real Estate sector of Pakistan has a clear idea of the importance of facilitating these international investors with the high standard living facilities in Pakistan.
For this reason the Real Estate authorities, specifically speaking here, the Gwadar Development Authority has come up with some amazing industrial and residential schemes and plans that are well furnished with all what makes a living luxurious. With the introduction of new ideas about the standards of living, the Real Estate sector of Pakistan is now diverting its preferences to induce the luxury living facilities to each of its further property ideas.
The trends of buying luxury apartments have also increased in past few years with a clear number of 9%. According to the reports, the reason for this change in buyer’s behaviour is due to the demand for well-maintained and secure housing facilities. For this reason, there is also a clear increase in the price of these properties for about 120%. (source: Pakistan Economic Survey, 2016).
Prominently, the trend of buying such property can exclusively be seen in Karachi as compare to Islamabad and Lahore. However, with the fast developments in the CPEC Project, the urban extension and the trend of living in cities, these major cities have become much congested. The land prices are also increasing and it is counted as another reason for the increasing trend of apartment-style living. The increase and shift in population is another reason why the demand for apartments has increased in cities like Lahore and Islamabad/Rawalpindi.
Another reason for the popularity of apartments is that they are multi-purpose buildings that offer both commercial and residential services like shopping malls, office suits, standalone shops and served apartments. Another perk that you may get is that you can buy an apartment in easy to deal with installments that you can manage with your limited income or salary. However, it depends if your preferred property is offering such facilities or not.
If you think that the picture is all rosy, you may have had a wrong perception. Despite the fast booming real estate sector of Pakistan and ignoring the on and off slumps that shake the market, the housing backlog of Pakistan is about 12 million units. In simple words, the reason why many of the housing and community projects have failed to complete in Pakistan is that they have failed to offer an appreciative price for each case. If we review the price per unit of the residential property in Pakistan, we can say that only 1% of the housing unit development per annum is able to cater the 68% of the net population of Pakistan. It consists of the people with monthly income of PKR 100,000 or above.
Although there are many projects under construction, aiming to offer budget living opportunities to people, there is still a need to address the underlying reasons. Only after that, the white and blue collar workers will be able to have realistic chances to have their own home.
Some market leaders claim that there has been a comprehensive discussion among developers, builders and the real estate agents to plan, execute and offer affordable home financing options to make standard living affordable for all.
Before the introduction of Government tax scheme in 2016, the Real Estate market of Pakistan was at its boom, but investments started to die in 2017. But as now we have crossed more than half of 2018, every major investor seems to have concerns about the behaviors of the Real Estate market in Pakistan. Some market experts claim that the current Real Estate market is at worse as compared to what it was back in 2005.
The luxury properties are believed to be the most affected areas in 2017 and are predicted to have some stagnation in the year 2018 and so. The reason is the higher costs that are not possible for an average person to afford. There are many underdeveloped products that are facing issues like delay in possession etc. For many reasons, the investors are looking forward to investing in the on-ground projects. While on the other hand the 3 or 5 Marla properties are touching the price of 50 Lakh PKR or more. While a modest budget needs a lower price for attraction. Although there is still some stagnation things are expected to be on track in some time. Well populated and developed areas in Pakistan are also less affected in terms of price while in settled areas the rent income is another major attraction for the investors.
A massive drop in prices in the Real Estate sector has created an alarming situation for the investors and the developers. It is necessary for them to offer timely and quality development services to get the investor by their side for a longer time period. Thus necessary is to look over fulfilling the basic necessities of life and to work on the development process speedy while maintaining the pricing model that can be affordable for a middle-class person.
The investors must also behave like an active opportunist and always try to look for the positive side of the picture. The property prices in many sections of the real estate are lower than how they were in the past and thus it becomes the best time to park the investments and look for potential investment destinations like Gwadar, DHA, Bahria Town and other such societies and investment opportunities.
However, it is important to keep in mind that miracles do not happen overnight and things take time to change. The same is for the Real Estate market in Pakistan, however, the time is almost there when the local and overseas investors both will find the handsome amount of opportunities to get a better return on investment by being a part of the real estate market of Pakistan.