Real estate is a major and growing industry in Pakistan, and Pakistan spends $5.2 billion on construction. Despite the improvement, we have seen many people in Pakistan still lack primary living facilities, i.e. houses. It thus clearly demonstrates that there is a great need for growth in the real estate market so that all sources of income can afford the need for life.
The State Bank of Pakistan (SBP), in its report on ‘The State of Pakistan’s Economy’, recently noted that the combined contribution of the construction and housing sectors “has been consistently higher than nine-percent over the past decade”. Reason for the growth are:
- Population Growth
- Deformation of Family System
Pakistan’s real estate state has made a major contribution to its economic development. According to the World Bank calculation, the size of the country’s real estate assets is between 60 and 70 percent of the country’s total wealth; if these figures are extended to Pakistan, the approximate size of the real estate sector is between $300 and $400 billion
Fast Facts About Housing Market of Pakistan
Since 2011, according to estimates, the prices of plots in Pakistan have nearly tripled, whereas house prices have surged by 139%. Experts identify this market dynamic as having been fueled by intensive speculation. They say that investors in Pakistan treat real estate as a commodity: property is purchased in bulk, and later sold for higher gains.
Family Size & Types of Housing – Featured
Large Family Size – Future High Potential for the Housing Market
Market prices of Residential property in Pakistan (source: Zameen, 2019)
PKR – Price per m2 in – (Land & Construction)
Appropriate for a diligent investor
The new real estate market is very appropriate for a diligent investor. It’s not all gloom and doom in the plots market, as DHA Peshawar has doubled and in some cases, tripled the investment in two years and is currently at an all-time high. Similarly, investment in DHA Lahore has been bottom-up and is a lucrative opportunity if you want to invest in property. Besides this DHA Multan offer a great opportunity to invest in plots, it may not be as large as DHA Peshawar, but it will definitely be a region that will see a potential increase in 2021 and 2022.
Factors Impacting Housing prices in Pakistan.
|Rate of risk-free return||Capital value tax|
|Buyer’s profession||Stamp duty|
|Housing scheme repute||Corruption level|
|Sector development||Withholding tax|
|Transfer fee||Capital gain tax|
|Widening gap||Market sentiment|