Since the outbreak of Covid-19 pandemic and the complete shutdown of all social and economic activities, the real estate trends in Pakistan 2021, surprisingly, improved because the only sector, flourishing at that time, was the construction & real estate sector in Pakistan. Push to this sector was provided by the government to carry out its two-pronged strategy.
The real estate sector still has the potential for growth and development with untapped human resources for many reasons. Firstly, the construction sector constitutes only 2.53% of the GDP of Pakistan. Secondly, the construction sector has a high potential for absorbing the labor force as it’s currently employing approximately 8% of the total labor force.
The government was successful in supporting the economy and providing employment opportunities to the daily-wage workers during this challenging time. However, the new problems sprang up in the wake of tax amnesty laws and the lowest interest rate by the State Bank of Pakistan.
WHAT IS THE FUTURE OF REAL ESTATE TRENDS IN PAKISTAN 2021?
The future of the real estate business in Pakistan is optimistic due to the most favorable environment for doing business in Pakistan. The government of Pakistan has taken the following crucial steps to prop up the faltering economy, increasing population density and the highest rates of unemployment.
TAX AMNESTY LAWS
In finance Bill 2020, Imran Khan government granted amnesty from taxes to the construction companies and real estate property investors. The government’s motive behind this bold initiative was to whiten the black money of the elite class.
These measures proved successful as a 132% increase was witnessed in the registration of new land development companies. On the other hand, twenty-one foreign companies showed their interest quickly in the real estate sector. They established their businesses in one year after the proposal of tax amnesty. The number of new real estate projects in Pakistan 2021 is increasing impressively every day, giving Pakistan the status of a business-friendly country.
DECREASE IN THE RATE OF NET CAPITAL GAINS
To accelerate the sluggish economic activity, the PTI government approved a 25% decrease in the rate of net capital gains. It was highly appreciated by the investors as it increased investment trading considerably. The real estate trends in Pakistan 2021 are more than satisfying and quite optimistic so far. Avoiding a policy of cosmetic measures and delivering the best supportive policy can only ensure the growth of this sector.
INCREASE IN EMPLOYMENT
There’s an oversupply of labor and daily-wage workers in Pakistan. For absorbing this abundant labor supply, the real estate sector was the single sector to utilize this manpower. Currently, only 8% of the total labor force is working in the construction sector. After giving boost to the construction industry, this one-time increase in employment will have a ripple effect on other industries. Interestingly, more than 40 industries are directly aligned with the real estate sector in this highly-populated country.
CPEC IMPROVED REAL SECTOR TRENDS IN PAKISTAN 2021
The CPEC in Pakistan has greatly provided an impetus to the economy and real estate sectors alike. Providing unemployment to daily-wage laborers, the CPEC proved a catalyst for improving the economic condition of many in Pakistan.
Several real estate projects in Pakistan, commercial sectors, and mixed-use buildings have been constructed along the CPEC route, opening up new business horizons for investors and residents alike.
LOWEST INTEREST RATES
The tax amnesty policy and lowest interest rates excavated hoardings and black money successfully. Most importantly, the investors began investing that money in the real estate sector. The State Bank of Pakistan (SBP) dropped the interest rate level to 7 percent. It was a massive reduction of 625 basis points to support the housing sector until now.
TOURISM SECTOR AND REAL ESTATE TRENDS IN PAKISTAN 2021
With the improved ranking on the ‘ease of doing businesses and ‘world tourism index’, the demand for tourist places has increased incredibly. The construction sector caught the special attention of the government during the pandemic was not, undoubtedly, without any reason. It was in this background that the real estate sector got all the perks of improving the business sector.
With a great potential to thrive with the innovative strategy, the real estate sector can grow dynamically.For this, an overhaul of the bureaucracy is important to remove legal, financial and structural barriers, .
However, there’re still some problems that require immediate solution with large-scale corrective measures. Rational and timely decisions are the need of the hour before these problems start taking a toll on the progress of Pakistan’s economy. Illegal housing societies and documentation of this sector are in dire need of regulation at the right time.
Transparency and corruption-free housing projects are necessary to achieve a milestone in this sector. If you want to know more about real estate Pakistan news 2021 on real estate trends in Pakistan 2021, contact our team or leave a comment in the comment section.