Catch the Pulse of Pakistan’s Housing Market


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Categories : Business , Economy , Market Research

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:

  1. Population Growth
  2. Urbanization
  3. 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

  • Roughly 30-35% of the country’s employment is directly or indirectly affiliated with the construction
  • Only 32 million houses have been built in Pakistan since 1947
  • Demand of annual housing of around 700,000, out of which only 50 percent is met every year
  • 1% of housing units developed annually cater to 68% of Pakistan’s total population-(people who earn a monthly income of Rs 30,000)
  • 56 percent of housing units target 12 percent of the population, comprising individuals with a monthly income of Rs 100,000 and above
  • Asia’s lowest at 0.25 percent mortgage finance to GDP ratio, with a 3.4 percent regional average; around 3 percent in Bangladesh and 11 percent in India. The SBP estimates that the house price to income ratio is 20:1 in Pakistan (compared to a global average of 5:1)
  •  Increased levels of urbanization and migration have resulted in the development of second-tier city centers.

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

Family SizeTotalFemaleMale
SINDH5.62.72.9
ISLAMABAD6.02.83.1
PUNJAB6.43.23.3
PAKISTAN *6.53.13.3
BALOCHISTAN7.03.33.7
KHYBER PAKHTUNKHWA7.93.94.0
FATA9.04.44.6

Market prices of Residential property in Pakistan (source: Zameen, 2019)

PKR – Price per m2 in – (Land & Construction)
YearIslamabadRawalpindiFaisalabadKarachiLahoreMultan
2011              21,743              23,885              16,609              47,738              23,595              46,554
2012              24,456              28,105              17,793              62,409              28,772              47,964
2013              36,005              38,330              18,514              87,198              40,214              53,960
2014              38,782              41,194              18,751              96,821              45,467              57,286
2015              39,191              41,194              22,561            113,527              50,407              61,796
2016              42,787              41,312              23,864            127,660              55,897              62,388
2017              40,645              42,485              22,873            139,802              56,683              65,369
2018              42,453              36,737              26,070            136,282              59,923              67,113
2019              45,951              48,890              26,802            130,469              61,613              73,840
2020              48,534              51,258              31,743            133,569              64,788              79,179

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 returnCapital value tax
Buyer’s professionStamp duty
Housing scheme reputeCorruption level
Sector developmentWithholding tax
Transfer feeCapital gain tax
Widening gapMarket sentiment

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