The real estate is a significant and growing industry in Pakistan and in few years, Pakistan spends $5.2 billion on construction, and this is an effective growth in the real estate sector of Pakistan.
Despite the progress we see, still many people in Pakistan lack the primary facility of living, i.e. home. So, it clearly shows that there is much need of development in the real estate sector so that all source of income can afford the necessity of life.
With the new government of PTI in 2018, Prime Minister Imran Khan has made new announcement about the government’s ambitious scheme to build five million houses across the country.
Here, we will discuss the current situation of Pakistan’s real estate industry and how it is contributing towards the economy of Pakistan and what other factors are affecting it and what are the positive or negative changes it brings.
Real Estate contribution in Pakistan’s economy
Real estate is the backbone of any country’s economy just like it is also the backbone for Pakistan and different more industries, e.g. 250 are depending upon it. These industries include cement, timber, building, sanitary fittings, which are connected to real estate industry.
Real estate industry contributes only 2% of the national GDP, with the second-largest industries for the employer after agriculture.
Impact of CPEC on Real Estate Sector and Economy of Pakistan
Real estate is all about investment and gaining profit, usually short-term or long-term. One word comes in our mind when we talk about real estate in Pakistan and, i.e. Gwadar.
Gwadar is the future of the residential, commercial and industrial hub of Pakistan. Now, Pakistan has one more reason, and that is CPEC (China Pakistan Economic Corridor). The China-Pak Economic Corridor (CPEC) is a road link that will connect the two countries of China and Pakistan.
Economic Boost in Pakistan by CPEC project:
The results of CPEC on Pakistan will be enormous like,
- Different industries will be formed in Gwadar.
- A tremendous increase in job opportunities.
- Due to CPEC project, 5.07% of development rate will increase in Pakistan.
- It will boost our economy, and there will rise demand for more accommodation and land in Pakistan.
- After 2020, completion of the CPEC project, we will see a huge impact of this project on residential and commercial properties
Inflation and real estate industry
High inflation makes it difficult for people to purchase the house due to high prices. According to the Pakistan Bureau of Statistics (PBS), in March 2019, Inflation rate rises to 9.4% from 8.2%, it was the highest recorded inflation rate after 2013.
The real estate market reforms 2019
Imran khan after becoming a Prime minister of Pakistan, he did many reforms and modifications in real estate sector of Pakistan which directly link with Pakistan’s economy in many ways like:
- Most of these reforms were introduced to increase government tax revenues.
- To prevent speculative buying in the real estate market.
- Due to these reforms, there see a less investment from investors side in real estate industry of Pakistan due to which Pakistan’s economy faces a critical situation.
Due to political instability, high inflation, depreciation in currency and other factors have largely contribute to the low economy of Pakistan. However, the real estate industry has the potential to make growth and support in the economy of Pakistan’s in the coming years. Many new real estate projects are being introduced in 2018,2019 in Pakistan, which can bring better jobs opportunities and better living standard and more buying power and foreign investors to invest in this sector.