When USD is exchanged for PKR, definitely it affects the Pakistani real estate market and straightly impacts various sectors of Pakistan that are involved in economic development.
As we all know that when the USD rate increases, inflation up, and the rates of property and construction material are also high. Pakistan is facing many economic challenges since the pandemic. If we analyze the economic scenario, we notice that it is mostly influenced by the political turbulence and uncertainty in Pakistan.
Pakistan’s real estate market has the potential of trillion of dollars but due to a lot of hindrances, it couldn’t grow up properly. According to the World Bank, Pakistan can grow its economy through the real estate market and get a profit of around USD 300 to 400 billion.
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Economist holds the statement that the rupee value declines because of political disputes, curtailment in trade, hindrances in funds, and the mismanagement related to reactivation of IMF credit programs affects directly Pakistan’s expenditures and leaves the impact of instability on the economy.
IMPACT ON PAKISTAN’S REAL ESTATE
The Pakistani rupee value is decreasing due to the high demand and scarcity of the USD dollar. The decay of the rupee value is getting the attention of different businesses such as the real estate industry, Stock exchange market for how to handle this drastic loss.
The result is that inflation is going up, making the cost of living more expensive for people. Moreover, there is no measure to increase the exports of Pakistan. As a result, there’s high demand for the USD to import the essentials of life from other countries
Due to the influence of the USD dollar on Pakistan real estate, it’s facing critical circumstances such as:
- overseas are not investing in the real estate market
- Lower rate of clients.
- High real estate property prices.
- Overseas are mentally not ready to invest in overseas schemes.
- Inflation of construction material.
The Pakistani currency lost its worth considerably in the last two years against the USD dollar. If we look back in 2020, the 1 ft square price was 9000 PKR, but now its rates have increased to 15000 PKR in residential property. Commercial property prices increased from 80,000 to lacs and plots prices reached to crores.
For a common person, it’s hard to purchase property because of the high impact of the USD to PKR rate.
As we all know that overseas Pakistanis are the backbone of the Pakistani economy, and their support encourages Pakistan to move ahead in different sectors for development. But the main thing is that they also need surety if they are investing in Pakistan, they will also get profit in investments rather than loss.
Since the USD dollar is at its peak, an organization is predicting if the circumstances remain the same Pakistan will face an economic crash. From this prediction, we can analyze how terribly Pakistan is on the verge of a crisis.
REASONS BEHIND DEVALUATION OF PAKISTANI CURRENCY
Many reasons float behind the devaluation of the Pakistani currency. But most people consider that political instability because the former prime minister’s government was dethroned by the PDM at that moment. Pakistan’s rupee devalued internationally as a result. Other reasons are given below, such as:
- An increased current account deficit
- Fall in foreign exchange reverses
- Meeting the pressure of payment
To wrap up the whole conversation, we can say that the impact of the dollar on the PKR rate is very drastic for Pakistan’s economy. Not only this, but the dollar also influenced different developing sectors, such as the real estate market. Overseas Pakistanis invest in this sector due to the high-profit rate. Since PKR value decreased, real estate investments have also been affected.