Pakistan’s real estate sector is one of the country’s most important and fastest-growing sectors. Per year, the nation invests more than $5 billion on building projects. Today, we’ll look at the Pakistan real estate market in 2021. We will discuss and forecast the real estate market’s success in light of the present situation and potential future events.
The government believes that the budget they are presenting is tax-free, which is a huge accomplishment given the country’s dire economic condition. Opposition groups, on the other hand, slammed the budget, claiming it was incapable of dealing with the current financial crisis.
The budget was touted as a major economic stimulus, but the bubble would eventually fizzle out, and the real estate market will begin to fall. The PTI government’s budget for 2020-21 is nothing more than paper, far removed from reality. Pakistan’s economy is forecast to contract by 1.5 percent in 2021, according to the IMF, while the government expects it to grow by 2.1 percent. The actual GDP fall would be 4.5 percent if the government’s inflation target of 6.5 is used.
COVID-19 and the Locust Attack were the icing on the cake for Pakistan’s economy. Unstable border conditions add to the economy’s woes. People are also less likely to invest in real estate because of the unreliable political and economic condition.
End User Market:
The real estate market’s future buyers include local Pakistani professionals, businessmen, and expatriates. However, one of the many problems in the real estate market is the diminishing buying power of these local Pakistanis. Gulf nations, on the other hand, have passed legislation requiring private firms to reduce the wages of overseas employees by 40%. According to this ratio, remittances are forecast to drop by about $5 billion in 2020-21, which is roughly equal to the cost of building one LAC home. In other words, our real estate’s bad days will continue.
Contribution of Real Estate Sector to the Economy of Pakistan:
Pakistan’s real estate industry is one of the country’s most important economic foundations. According to World Bank estimates, real estate assets account for 60 to 70 percent of a country’s overall wealth; if we extrapolate this to Pakistan, the average size of our real estate market is between $300 and $400 billion.
Due to a number of financial, commercial, and political challenges, Pakistani real estate has underperformed. However, we should expect that conditions will improve in 2021, if not suddenly, then eventually.
Due to global unrest and fluctuating economic and financial policies, real estate has stalled since 2017. The lack of options for developers and the imposition of a non-filer ban contributed significantly to the real estate sector’s decline.
The stringent regulations imposed by the FBR on non-filers’ banking activities deterred investors from investing in the real estate industry in 2018-19. Another factor contributing to the real estate sector’s decline is the inability to use infrastructure budgets, which resulted in a recession in the construction industry.
CPEC is one of the few reasons we think Pakistan’s real estate sector will boom in the coming years. The China-Pakistan Economic Corridor is a landmark initiative between the two countries that has the ability to alter Pakistan’s economic dynamics. Although the CPEC’s significant economic zones are yet to be developed, the benefits of the project can already be seen in the improved power situation and the partial completion of the Lahore-Karachi motorway.
The real estate market in Pakistan is highly volatile. As a result, you must remain alert and informed about the new trends and updates in Pakistan’s real estate sector. Being mindful of current real estate sector trends will assist you in making a sound and profitable real estate decision.
Except in times of inflation and instability, property prices in Pakistan rarely rise. This reality will make the investment more difficult
The real estate sector is uniquely capable of persevering in the face of adversity, which is something unique about it. Fair property prices are urgently needed to make property accessible to all citizens, ensuring the country’s real estate market’s long-term success. So, real estate sector is booming and their is a huge prospect of this sector in Pakistan.