Real Estate contribution in rehabilitation of Pak economy
Real Estate Development is the largest, most progressive industrial sector in Pakistan.
Nearly 250 ancillary industries, such as cement, brick, timber, steel, electrical industry etc are dependent on the real estate development industry.
The industry market is valued at in excess of $1 trillion, or three times the GDP of Pakistan.
Upon the onset of the Covid pandemic, every sector of the economy was hit hard, however the real estate sector was pushed to open its doors first, as it caters the second largest number of workforce, employed by the real estate development sector.
Apart from increasing GDP of a country, Real Estate has been an important job creator for a country as well.
It creates numerous jobs ranging from skilled to unskilled employment which maintains a healthy economic growth. When jobs are created the economy also grows, and whenever people are working and able to provide for themselves, things stabilize.
Jobs create earnings which in turn, creates demand. It is spurring Pakistan’s economic growth.
Also,the CPEC’s entrance in development projects has already transformed the economy of Pakistan and resultantly, the real estate sector will grow further in the coming years.
Every land that is close to CPEC would see a roaring rise in value in the future. As the Pakistani Diaspora abroad started feeling uncertain about their futures in the countries abroad, the remittances suddenly shot up as they bought land in Pakistan instead of investing in the US or European countries.
In addition, the political uncertainty and lack of security in Pakistan caused most of the other industrial sectors to under-perform.
The investors, instead of investing in product or service-based industries, moved towards the more secure and profitable ‘Real Estate Market’.
According to a news resource, Pakistan is among the few countries whose real estate sector has ample room for growth as only 0.5 per cent of the country’s area falls under planned land.
This means at present, roughly 4,000 square kilometres of Pakistan’s land is classified as planned area out of a total 881,913 square kilometres occupied by the country.
The government of Pakistan has already provided a relief package and reduced property tax at higher rates to encourage this industry.
Consequently, the rise of the market was so sudden that, like the gold rush, it attracted all sorts of people into the industry.
There was no infrastructure to support this boom, and neither was any regulating authority prepared to handle the legislations, requirements and regulations of the sector. A clear majority of the prospectus are genuine, trained and experienced agents and dealers and purely working for the prosperity of Pakistan.
The government should formulate a strategy for tackling the problems which investors and buyers are currently facing in the real estate market.
An ease in the taxation would be a welcoming incentive. Transparency and regulation of real estate will always remain building blocks for the future growth of the realty sector.
As many local and foreign investors are investing in this industry, it is the government’s utmost responsibility to keep this sector as the priority.
—The writer holds MSc-IR (Quaid-i-Azam University Islamabad) and MBA-Marketing (Bahria University Islamabad).