Table of Contents
Overview
The real estate industry in Pakistan is in a turbulent position. The country has been in a chaotic situation for the last two years. Neither the government nor the economic situation was stable. Thus, the real state of real estate in Pakistan was also unstable, and the investors were not spending money because of the vague policies and circumstances.
However, the new government has been elected, and it is hoped to bring favourable policies for the investors.
In this blog, we shall talk about the real state of real estate in Pakistan.
Real State of Real Estate in Pakistan
The Real Estate Market in Pakistan is expected to touch a value of US2.1 trillion dollars in 2024. Furthermore, among the residential and commercial sectors, the residential sector leads the real estate market with a predictable market volume of US1.49 trillion dollars in 2024.
In short, the real estate market in Pakistan has been experiencing a demand for luxurious apartments in the major cities of Pakistan.
The Real Estate Market in Pakistan is expected to touch a value of US2.1 trillion dollars in 2024. Furthermore, among the residential and commercial sectors, the residential sector leads the real estate market with a predictable market volume of US1.49 trillion dollars in 2024.
In short, the real estate market in Pakistan has been experiencing a demand for luxurious apartments in the major cities of Pakistan.
The Current State of Pakistan's Real Estate
Currently, Pakistan’s real estate market is in chaos, and customers are waiting for the right time to invest in it. It is predicted that most investors will invest in Pakistan’s real estate market a few months later. Furthermore, investors should invest their money in the real estate sector as it has much potential to offer lucrative profits. Ultimately, the real estate market shall boom because the demand exceeds the supply. Â
Real Estate Market Situation after the Election in Pakistan – Real State of Real Estate in Pakistan
There were many rumors that the real estate market in Pakistan would not boom. But now the situation is changing, and people have started purchasing plots, luxury apartments, and commercial areas. The market is improving, and investors are interested in investing in the real estate sector. Furthermore, Overseas Pakistan has also shown interest in investing in this sector.
Moreover, the real estate market end-users have increased and started investing in apartments and shops. If you rent your properties, you will get a handsome amount. About 70% of investors invest in the real estate market, so there is a chance that they will get a 5 to 10% increment.
When to Invest in the Real Estate Market
Right now, it is the perfect time to acquire a property as the market is getting better, and the market price is low compared to the peak point of the real estate market. Always remember, real estate is the need of the hour. The market is down, and the prices are low, too. Thus, start investing if you want to make a profit shortly.
Forecasting Pakistan's Real Estate in 2024
The real estate market of Pakistan is going through a harsh time because of poor economic growth and a deficit of strategic policies in the real estate market.
The real estate market of Pakistan plays a significant role in economic growth, infrastructure development, and employment generation. According to the SBP (State Bank of Pakistan), the real estate industry contributes 2% to the country’s GDP. There will be 5.2 trillion Pakistani rupees worth to Pakistan’s real estate market.
Briefly, the real estate market of Pakistan has been growing and contributing a lot to its economy. The market price is low; within a few months, it will boom, and the property price shall go up.
The Real Estate Business Landscape in Pakistan
The real estate business landscape in Pakistan belongs to;
- Buying
- Selling
- Renting
- Development of properties
- Land
- Buildings
- Structure of development for
- Residential
- Commercial
- Agriculture
Nonetheless, the real estate business landscape of Pakistan includes stakeholders like
- Housing societies
- Real estate developers
- Investors
- Regulatory bodies
- Agents
- Brokers
- Government authorities
Analyzing Trends and Challenges in Pakistan's Real Estate Market – Real State of Real Estate in Pakistan
In Pakistan, the real estate market is vibrant. There are some challenges and trends that are affecting the real estate landscape. Thus, knowing about these challenges and trends is essential so real estate businesspersons can make well-informed decisions and flourish in the market.
Dynamics of Supply and Demand
The dynamics of supply and demand of the real estate market in Pakistan are affected by elements like
- Urbanization
- Population Growth
- Economic Conditions
- Deficits of Homes
Please read our Current Real Estate Situation in Pakistan blog for more information.
Projecting the Future of the Real Estate Business in Pakistan for 2024
National and international economic changes will impact Pakistan’s real estate market. However, the investors have been aiming at rental properties, including
- Skyscraper Buildings
- Commercial Areas
- Corporate Office Buildings
The reason is that these properties are predicted to provide the most profitable investment opportunities because of the high rate of urbanization.
Addressing Issues in Pakistan's Real Estate Market
Scams and frauds are the most significant issues faced in Pakistan’s real estate sector. The prominent market players do not fulfil several commitments, and the general public has to face all the losses.
Let’s disclose these frauds and scams. These scams and frauds are;
- Unlawful Housing Societies
- Misleading claims
- Deceptive statements on online platforms
- Accessibility to essential utilities
- Project completion delays
- Instances of one property being sold to multiple buyers
Identifying Prime Investment Opportunities in Pakistan's Real Estate Sector
Real estate is one of the most profitable sectors in Pakistan. As urbanization is at its peak, the demand for property is increasing. You can invest in several places, including
Residential Property
- Apartments
- Houses
- Single-family Dwellings
- Multi-family Residences
- Villas
Commercial Property
- Apartments
- Houses
- Single-family Dwellings
- Multi-family Residences
- Villas
Vacation Rentals
- Hotels
- One-bed Space
Student Housing
- Male Dormitories
- Student Apartments
Industrial property
- Warehouses Facilities
- Manufacturing Plants
These sectors offer prime investment opportunities in Pakistan’s Real Estate Sector.
Impact of the New Government on Property Prices in Pakistan – Real State of Real Estate in Pakistan
For the last two years, the real estate market has been in turmoil because of political and economic instability in the country.
But now, the new government has been elected, and there is hope that the country will have political and economic stability. During the time of Imran Khan’s government, an amnesty scheme was launched for those willing to invest.
However, it is proposed that the new government bring the same amnesty scheme for the real estate market. Moreover, it is hoped that the new government will introduce the construction amnesty to ease the construction in the country. Thus, an amnesty scheme shall allow the investors to invest in the country, and consequential, the real estate market of Pakistan shall be stable.
Understanding the Property Market Cycle in Pakistan
The real estate market is a vibrant and ever-changing landscape affected by elements like supply and demand, investor sentiment, and economic conditions. Investors must understand the property market cycle to make well-informed decisions and maximize returns. The Real Estate Market Cycle has four steps, including;
- Recovery Phase
- Expansion Phase
- Hyper supply Phase
- Recession Phase
Let’s talk about the details of the real estate market cycle.
Recover Phase
At the time of the recovery phase, the country experiencesÂ
- Expansion
- Low vacancy
- Property prices increase
- Demand also increases
Factors contributing to the recovery phase
- Government Policies
- Economic Growth
- Investors’ Confidence
Expansion Phase
At the expansion phase, there is a high demand of
- Property
- Leading to low vacancy rates
- Rising rents
- Increasing property value
- Development starts to return at this phase
- Supply and demand are in equilibrium
At the time of the expansion phase, Pakistan experiences
- Economic growth
- The highest rate of urbanization
- Increasing demand for real estate
Hyper supply Phase
During this phase, the balance between demand and supply in the expansion phase turns into excess. It is caused by
- Overbuilding
- Rising vacancies
- Rent growth
- High construction rates
Recession Phase
At the recession phase,
- The construction rates are low
- The rental rate growth is low
- Increasing vacancy
It is indispensable to understand the real estate cycle. The investors may adapt their strategies after learning about the different phases of the real estate cycle. However, the duration of each phase may vary, and external elements like regulatory policies, economic stability and the real estate market cycle. Once the investors are fully informed about it, they can make well-informed investment decisions.
Assessing the Role of Foreign Direct Investment (FDI) in Pakistan's Real Estate Industry
Regarding the Foreign Direct Investment (FDI) in Pakistan’s Real Estate Industry, the real estate sector is considered one of the most lucrative sectors for the Foreign Direct Investment (FDI) in Pakistan. According to the State Bank of Pakistan, Pakistan has received 2.1$ billion dollars of Foreign Direct Investment in the financial year 2022-2023. Â
Benefits of Foreign Direct Investment:
- It brings skills and technology
- It creates income and employment choices
- It brings the improvement of infrastructure
- It improves public services
Pakistan’s Real Estate Market is the most lucrative sector for foreign stakeholders. Let’s disclose the essential features and benefits of the real estate market of Pakistan.
As Pakistan’s population is growing faster, there is a massive demand for homes. Following the World Bank, Pakistan has a deficit of 10 million homes. Thus, this demand and supply create a gap and allow foreign investors to enter the real estate sector.
From 2022 to 2023, the real estate sector contributed 9.5% to the country’s GDP, according to the Pakistan Bureau of Statistics. Moreover, the real estate sector in Pakistan is highly lucrative and offers good returns on investment. Furthermore, it provides gratitude to foreign investors.
Foreign Direct Investment benefits not only the investors but also the country.
- Contribution to the growth and development of the country
- Secure and stable source of wealth and income
- Barrier against inflation and currency depreciation
For the country, Foreign Direct Investment provides
- Creation of employment opportunity
- Generation of income opportunity
- Boost in exports and foreign exchange services
- Improvement of living standards and enhancement of social welfare
Conclusion & Disclaimer
Pakistan’s real estate market is expected to grow by 2024. The team of Luxurious Marketing has thoroughly researched and collected the most essential information for its valuable readers. We have highlighted the real state of real estate in Pakistan. This blog is entirely for awareness purposes. Please don’t invest based on this blog’s material. Please consult with professional or bigwig investors before investing anywhere. Proceed at your own risk, and we are not responsible for any loss.
Waseem Ali, a communication studies specialist, holds foreign qualifications and works with us as a research writer. With numerous well-researched articles on real estate, his work is widely read and quoted. He enjoys philanthropy, hiking, and trying different cuisines.
