Pakistan’s real estate market is quite dynamic and trends fluctuate over time. However, in recent times the whole landscape of the country is redefining through the real estate industry. It is showing magnificent growth and is offering a lot of opportunities for investors, whether for commercial or housing purposes.
Before considering your investment in real estate, one should have complete knowledge of the market.
Here is a list of information to provide you with complete knowledge of the current market situation and other factors.
Size and Growth of the Real Estate Market in Pakistan
Pakistan has witnessed significant growth and transformation in the real estate market. In terms of both size and diversity, it has expanded and shown various developments in the areas of residential, commercial, and other factors such as population growth, urbanization, and increase in investments.
Capital cities like Karachi, Islamabad, and Lahore had expansions of modern housing societies and commercial projects. The current value of the Real estate market in Pakistan is set to reach US$ 1.95tn in 2023 with an expected annual growth rate of 7.27%.
Demand of Real Estate in Pakistan
In 2010, Demand for real estate showed a significant increase. New housing developments were aimed at the upper middle class as a result investments were made and the prices for properties exceeded 10 million PKR.
It is reported that the housing gap in Punjab was around 2.3 million units and is expected to reach 11.3 million units by the end of 2047.
To assist the real estate sector, the government of Pakistan has also reduced the interest rates on mortgage loans.
With the significant rise in demand in the real estate market, Pakistan’s nominal GDP can have a potential growth rate of up to 6.2% by the end of the year.
Current Trends in the Real Estate Market in Pakistan
Real estate trends in Pakistan involve overall changes and developments in the property market and certain shifts and trends also influence the buyer decision.
These trends also vary on government regulations and tariffs. When the tariffs go up, the demand for plots, houses, or commercial areas starts to decline and it keeps going down as the tariffs rise more.
At the present time, demands in the real estate market are showing potential growth, mainly in areas of Islamabad, Lahore, and Peshawar after the huge recession in the real estate market. Multiple housing Societies are delivering their best offers with very manageable rates due to which investors are showing great intent to invest in the market.
Challenges in Real Estate in Pakistan
Currently, there are three major challenges in Real Estate in Pakistan.
- Lack of planning
- Lack of regulations
1. Lack of Planning
Lack of planning is one of the major challenges in Real Estate in Pakistan. It has been decades since the problem remained unsolved and with the huge growing rate of population, there is a huge risk of a serious crisis in the real estate market.
2. Lack of Regulations
Real estate of Pakistan has a huge part in the commercial sectors in Pakistan, however, there has been no regulatory body to keep after it. Regulations provide protection from many negative forces and protection to the investors hence many authorities need attention to provide resources and initiatives to sustain this matter.
More than 40 percent of the real estate of Pakistan’s capital gets compromised and stuck because of huge malpractices in the country. It’s also happening due to the absence of regulations to protect the owners of the capital.
Opportunities in the Real Estate Market in Pakistan
There are reports which show a magnificent rise in demand in the real estate market. It’s also due to multiple families migrating from place to place to have better opportunities, better homes, and better amenities.
There are many significant developments with an increased number of Housing Societies and many other real estate projects hence there is a lot of opportunity for investors to have beneficiaries from their investments in the real estate of Pakistan.
What is the Future of the Real Estate Market in Pakistan?
State Bank of Pakistan (SBP) shared statistics that in the future of the real estate market in Pakistan, the market will contribute a 2.6% increase in the country’s GDP and these contributions will increase more. This will increase the employment opportunities for people with the great expansion in the future of real estate in Pakistan.
What are the Key Factors Driving the Real Estate Market in Pakistan?
Factors such as urbanization, population growth, and increased demand for housing are the key factors driving the real estate market in Pakistan.
What is the Current State of the Pakistan Real Estate Market?
The Pakistan real estate market is showing gradual growth in property values, especially in major cities.
Is it Better to Invest in Residential or Commercial Properties in Pakistan?
The choice between residential and commercial properties depends on your investment goals.
Are There Any Legal Restrictions on Foreign Nationals Purchasing Property in Pakistan?
Yes, Banks and financial institutions in Pakistan offer mortgage financing for property purchases.
Are There Any Taxes Associated with Buying or Selling Property in Pakistan?
Yes, major taxes associated with buying or selling property are transfer tax, capital gains tax, and stamp duty.
How can I Verify the Authenticity of Property Documents in Pakistan?
Relevant authorities can help you to ensure the property’s authenticity.
What Should I Consider When Investing in Underdeveloped Areas or Housing Schemes in Pakistan?
Before considering investing, research the reputation of the developer, check the legal status of the project, and assess the potential for future development and infrastructure improvements in the area.
Can Foreigners Buy Property in Pakistan?
Yes, after the completion of all the legal requirements, foreigners can buy property in Pakistan.