In recent years, Pakistan’s property market has experienced significant economic growth. It’s one of the few industries that has thrived after the COVID-19 pandemic. Even with the real estate sector’s successful ascension, several issues must be solved as quickly as feasible if the industry maintains its good status.
The economy is a free fall
Budget 2020-21 is nothing further than a piece of paper with no manner on reality. According to the IMF, Pakistan’s GDP is expected to contract by 1.5 percent in 2020-21, while the government expects it to grow by 2.1 percent. Real GDP will fall by 4.5 per cent, based on the government’s inflation target of 6.5 per cent. COVID-19 and the Locust Attack alone are enough to bring Pakistan’s economy to its knees. The unemployment rate has remained stubbornly high. Another battle with India is on the horizon. In such an unstable political and economic environment, who will buy land?
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It is recommended that you do not invest in the stock market if you do not have satisfactory knowledge about the shares, how to trade, or the stock market as a whole. The stock market is extremely volatile, necessitating split-second judgments about selling or buying more shares. As a result, many investors have sold their stocks to invest in Pakistan’s real estate market.
Rates of interest
Interest rates are critical to the real estate market’s growth and development. People can borrow money from financial firms and banks. When interest rates rise, customers are less likely to take out loans, which reduces demand in the real estate market, particularly in the housing segment. The government should take drastic measures to secure a low-interest rate to promote real estate items. This will encourage investors and the general public to invest in real estate.
Real estate fraud is possible in Pakistan. Many people and bogus companies try to defraud innocent people by selling fictitious real estate projects. The digitizing of real estate records in Pakistan has begun, with all register and legitimate real estate projects being record. Make sure you conduct your study and check with your local development authority before investing in real estate projects to confirm the project’s authenticity. So, these are some real estate issues that are now affecting Pakistani society. To address these issues, we must work together as a nation to assure transparency, security, and communal well-being.
The real estate business in Pakistan is disorganised since few individuals and companies are familiar with the ins and outs of the industry. Unfortunately, many persons in Pakistan claim to be specialists in real estate. They lack the necessary real estate knowledge, skills, and competencies. As a result, they strive to defraud individuals and cause them financial harm. Many frauds have also been reveale in the media, demonstrating that many unlawful businesses exist in Pakistan, contributing to real estate fraud.
Immigrants from China
Because CPEC is a joint economic project between China and Pakistan, various engineers from both parties are need to build the project in Gwadar. The growth of multiple small cities, towns, and mini-projects along the belt is require to accommodate engineers and other workers. Gwadar’s land can construct various housing societies with all of the necessary utilities. The Chinese migration has had a considerable impact on rental returns in major cities, and this influx will continue to grow over time. The influence of Chinese immigrants may be seen in numerous Pakistani societies.
In real estate, a supply-demand imbalance could lead to inventory problems. For example, the number of current listings in a certain location may decrease while the percentage of potential buyers rises. Real estate loses due to such situations because a possible buyer drops out. Inventory difficulties can also cause cap rate compression.
To develop the tax base, the state must formulate long-term policies. Taxing existing taxpayers would be adverse in two ways: one, it would reduce the tax base as people began to use cash transactions instead of banking transactions to hide their wealth; and two, investors would park their wealth outside of Pakistan, purchasing assets in the United Kingdom, Dubai, and investing in offshore companies.
Muhammad Junaid is a CEO of VM Sol, senior Analyst, and Search Engine Expert. Extensive experience being an IT Manager in NextGen Marketing – Nova City. Work for years with local and international enterprises. Also, represent well-known brands in the UAE.