Pakistan Real Estate Market Is Surging Upward As We Speak
By comparing the situation of real estate sector in globally-renowned Western cities like London, Hong Kong, Toronto, Sydney, and Stockholm which are closest to a bubble, Pakistan is the only one to provide an added boost due to China Pakistan Economic Corridor (CPEC).
Before we go for the international trends, first let’s have a look at the Pakistan real estate market and its trends.
Pakistan’s Bureau of Statistics has mentioned that the national construction in Pakistan accounts for two percent of the total GDP (Gross Domestic Product)
Many commercial and residential projects are therein Pakistan which are not documented at their real values according the market. Due to these factors, it is very difficult to determine the value of real estate sector. According to FBR’s (Federal Board of Revenue) announcement in budget of 2015, the national real estate industry has a total worth of $700 billion.
It is expressive to mention here that the report was passed by the website of Messrs Bahria Town, which has a total revenue of $10 billion with an asset base rate of $20 billion.
Bahria Town has stated on its website, “The construction and engineering services industry is considered to be the largest and disjointed industry globally, having a contribution of 10-12 percent of GDP in many countries.
Total production capacity of Pakistan which is 350,000 units per year including both public and private sector and shortage of 800,000 housing units per year has caused the support to be around 450,000 housing units. Hence, it is observed that the investment opportunity for both national and international observers is much better than before.
According to some experts, there is currently a deficit of 800,000 housing units and it’s going to increase by 300,000 units each year.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has announced that the national construction sector has a growth of 9 percent which clearly shows its strength.
Residential market prices are high in Hongkong. Prices of the smaller houses rushed in the last four quarters. They are about three times higher than the prices recorded in 2003. They have achieved an annual growth rate of 10 percent.
All sub-indicators have clearly pointed out the high risk attached to the housing market. The depression in these prices shows a short life of the market. Real estate market prices again shot up to 12 percent and now increased up to 60 percent which is higher than 2012.
Inflation-adjusted prices in London are almost 45 percent higher than five years back while Real income has remained constant at 10 percent. The prices of house rising is slowing and then the prices are 2 percent lower in June 2016.
Prices of houses are crushed here in Toronto and the price growth has enhanced last year and finally reached an extreme of 20 percent per year in the last quarter. Real rents have increased by only 5 percent while the real prices have become doubled in 13 years.
Real prices have become doubled in the last10 years and finally reached to 60 percent which is more than twice as fast as income due to favorable financing conditions. Price growth has been crackled to 5 percent over the last four quarters.
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