Real Estate Problems in Pakistan: Prospects and Challenges
Real estate is one of the strengths of any economy. Land, who owns it, where it is placed all end up being important factors in where the property is gathered and where human society will organize itself. According to the World Bank, approximately 60-70pc of a country’s total wealth is saved in its real estate assets. If these estimates apply to the economy of Pakistan, then an evaluation in the real estate business would be $300 to $400 billion.
Notwithstanding the growth, we have witnessed many people in Pakistan still require basic living facilities, i.e., houses. It thus apparently shows that there is a great demand for increase in the real estate market so that all resources of income can manage the need for life.
Pakistan Real Estate is coming to the limelight very promptly after the contemporary economic situations as the Covid-19 and Locusts hit last year in Pakistan were pretty strong. People like to invest in the Pakistan’s real estate market after saving up money and promoting the real estate market in Pakistan. The government is trying very hard to make the prospect of the real estate business in Pakistan an investment-worthy venture.
Challenges for the Real Estate Market and it’s the Solution
The real estate market has been operating by uneducated brokers and dealers without the skills to reach potential clients. Many of these cases have also happened in cheats and scams where clients have lost their savings.
A governing body is required as there is no law display to restrict the limits of the so-called brokers and dealers on a federal and provincial level. People who need to invest in the real estate market should assess the project completely or consult reputable and renowned agents to assist them in their investment.
Many developers pass the real estate projects very delayed after the initial agreed date. The construction process is very slow and generates a lot of trouble in the meantime for the investors. The abroad investors are being scammed a lot of their hard-earned wealth by the fraud developers as they are displayed a positive picture of the projects and good impressions on the environment but there is nothing like that in actuality. The developers of the residential societies ignore the maintenance once after the society gets developed. There should be a decent check and balance to overcome these challenges.
The government requires to build long-term tax policies that do not tax the already tax-paying people of Pakistan. Taxing the taxpayers will be damaging to the Pakistani Economy in many ways such as
- People will not use the online transaction system for the transactions and begin using the cash to hide their wealth and lead to decreased taxes
- Investors will spend their money outside the country to purchase assets in foreign countries and spend money in offshore companies.
- An increase in taxes can also have a negative influence on the economy and many unemployment raises
A growing and constant approach are needed to bring improvements in the system for positive consequences on both the Pakistani Economy and the real estate market.
The Prospects of Real Estate in Pakistan
The Pakistan Real Estate Prospect 2021 looking well as many other investment possibilities are being neglected due to their unstable nature. The Pakistan real estate outlook for 2021 shows that it is going to be a year of growth for the real estate market due to various reasons. Most of the reasons that make real estate an excellent place to invest are discussed below:
Fluctuating prices of Gold
Many people like to spend on Gold as it serves many objectives. But recently, Gold is facing a very unpredictable market. Its rates can rise up to $2000 per ounce to begin drifting downwards very quickly. This trend has followed away many investors as they think it is not the time for a safe and secure investment in gold. Their investment in turn is going into the Pakistan’s real estate market.
If you do not have sufficient knowledge about the shares, how to trade, or what the stock market as a whole, then it is advised not to invest in the stock market. The market is very active and requires decisions in a few moments whether to sell or purchase more shares. This is not a safe and secure investment for many investors who are not willing to take unnecessary risks.
Due to this purpose, many people have exchanged their shares to invest in the real estate market of Pakistan.
Huge Decrease in Property Tax for 2021
The government of Pakistan has lessened the interest rate and proclaimed incentives for the investors and businessmen to decrease the economic influence of the pandemic. It is a support package for the construction industry with the double aim of offering employment to daily wage earners and encouraging economic activity.
The package also incorporates additional incentives for builders and developers to create low-cost housing for the poor under the Naya Pakistan Housing Program. The tax rate will be for the construction and the withholding tax will be waived off.
We can recognize this fact by learning that cement dispatches in the first half of the 2021 financial year were 29M tons, up by 16% year-on-year from 25M tons in the first half of the 2020 financial year.
The real estate market of Pakistan strengthens the economy of Pakistan to a great extent. Not only Pakistani investors recognize the potential in this market but the international investors are also excited and want to invest here.
One of the many foremost reasons for investment of foreign investors in Pakistani real estate is the durability of the social conditions of Pakistan and the secure environment. This was not the situation a decade ago as the environment became very vulnerable and people worried about the unstable and unpredictable nature of political and economic environments.