Fluctuating Movements in Pakistan’s Real Estate Market!

Pakistan real estate sector plays an important role in Pakistan. Pakistan has annually spent about $5.2 billion on construction output and it is basically 2 percent of GDP. There is a strong trend that has been observed in Pakistan’s real estate in past years.

Investment in the residential sector has increased by 5 to 7 % in 2015. There are about 5,398 real estate transactions by Pakistani nationals by investing round about AED7 billion. The list of top nations that have invested in the real estate sector has been released by DLD. According to that list, Pakistan has appeared to be the third largest sector.

The latest report which is based on the number of transactions confirms that UAE nationals are in leading position than all other nations by having a large investment of about AED37.4 billion while UAE nationals have made 12000 transactions by investing about AED37.4 billion.

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According to the DLD report, AED151 billion has invested in Dubai’s real estate market by 217 nationalities.

There are many investors who are on the top list from Egypt, Jordan, China, US, and Lebanon.

A recently conducted survey indicates some amendments in Income Tax Ordinance according to which 16000 out of 18000 real estate developers have finished their operations in real estate market.

Pakistan real estate market is slowing down day by day and there is huge fall in the property prices in almost all major areas and cities of Pakistan. The transactions of property are recorded low this year as compared to previous years. The Income Tax Ordinance-2001 has clearly shown amendments that have a strong connection with property valuation. Real estate market is continuously declining due to which demand for real estate sector is weakening. People feel risky to invest much in the real estate sector because the market is not stable nowadays. The amendments in Income Tax Ordinance-2001 were made through the Finance act 2016 from July 2016 and according to that act, the provincial government would no longer be able to evaluate the properties.

State Bank of Pakistan would be highly responsible for the valuations of land and property and will state it to FBR’s inland revenue department. Investment flows by real estate sector from Overseas Pakistanis have clearly seen in diminishing position just because of depression inflows from real estate sector.

According to the Price-income ratio, the housing prices keep on falling so they are affordable for the residents as the income of people will increase with the passage of time.

The inclination of buying luxury apartments has increased from 7 to 9% in the history of Pakistan from last 10 years due to high demand for well-maintained and secure housing units. Prices of apartments have increased by 120% from 2010 to 2016. Most of the projects of apartments are limited to Karachi and residential projects are mostly focused on Lahore and Islamabad.

State Bank of Pakistan has recognized a devoted Housing Finance Department and infrastructure to reinforce the market-based housing finance apparatus.

There are admirable efforts by the Government in introducing the process of transparency and documentation. There is a long time to go for the Pakistan’s real estate sector for the improvement of all investors.

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