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In recent times, Pakistan’s property market has experienced significant growth. Despite the COVID-19 epidemic, it’s one of the few industries that thrived. There are, however, several issues that must be addressed immediately if the property market is to maintain a high standard of excellence.
Today, the term “real estate” is widely used. You may have heard it dozens of times a day. In Pakistan, real estate developments are advertised in abundance on televisions, billboards, and the internet. Over the years, this industry has grown exponentially, particularly in Pakistan. Astonishing new developments are being constructed by developers, complete with extensive infrastructure and stunning architectural designs. For the sake of conciseness, Pakistan’s real estate market has just begun to flourish.
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Even though Pakistan’s real estate market has grown significantly, there is still much space for development. Investing in Pakistan now appears to be a dangerous endeavour. What exactly is going on here? Why is it so difficult for clients in this industry to make a decent purchase? The answer of this question can be given in a variety of ways. Factually, Pakistan is now placed 121st in the International Property Rights Index, despite high demand levels at home. In the Jones Lang Lasalle Global Real Estate Transparency Index, Pakistan is assessed as having Low Transparency, with an overall rating of 88.
Challenges Faced by Real Estate Sector in Pakistan:
For more than a decade, the government has been praising the real estate industry as a development engine. Investors in Pakistan and those from other countries tend to view the company as having the ability to attract capital. Among the issues that this sector will have to cope with are the following:
TRUST ISSUES OF INVESTORS:
The most difficult task for a developer is to persuade investors that their investment will be safe and that the project will be free of disputes and multiple claims of ownership. Due to the lack of long-term profits, they are sometimes obliged to make “empty” investments that do not pay off over time. In addition, investors, especially those living outside Pakistan, are plagued with litigation and court cases that they cannot usually return to dispute.
LACK OF RESOURCES FOR REAL ESTATE EDUCATION:
In Pakistan, you’d be hard-pressed to find a real estate expert who is either accredited or competent. This firm is being operated by a large number of people that rely only on their own experience. Ensuring that real estate brokers are well-trained and certified will make a huge impact. Real estate professionals can use their abilities to their fullest extent if they thoroughly understand the industry.
There has been a rise in demand for competent real estate brokers in the aftermath of the property market’s digital transformation. Real estate courses are now solely offered by the Panjwani Institute of Business Studies and Technology (PIBSAT) and the National Institute of Real Estate Management (NIREM).
POOR ECONOMIC CONDITIONS:
The 2020-21 budget is nothing more than a piece of paper that has no bearing on reality. The IMF predicts a 1.5% fall in Pakistan’s economy in 2020-21, whereas the government projects a 2.1% increase. Real GDP is expected to fall by 4.5 percent if the government’s threshold of 6.5 percent is met.
Even with COVID-19 and Locust Attack, Pakistan’s economy is doomed. The rate of unemployed people is still very high. There’s a new conflict with India on the horizon. Who will invest in real estate in such an uncertain political and economic climate?
DEBT TO GDP RATIO:
Property prices in Pakistan increased dramatically between 2003 and 2013. Throughout both booms, the debt-to-GDP ratio fell. Debt as a percentage of GDP In 2003, the percentage was 50%, whereas in 2013, it was 66%. Despite this, the debt-to-GDP ratio currently stands at 86 percent and is rising. For this reason, we can observe how Pakistani real estate prices are expected to rise.
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MISREPRESENTATION ABOUT THE SECTOR:
People used to depend on word of mouth to assess the growth and profitability of real estate investment prospects in the past. There were no reputable sources of information accessible at the time. However, technical advancements made a huge difference with the start of the 21st century. With the use of technological platforms and Search Trends, you’ll always be aware of the changing rates and performance of Pakistan’s property markets. Cutting edges are enabling us to put an end to the idea of disinformation and erase other bad practices like property scams, enabling property investors the faith their clients formerly had in them.
Muhammad Zaeem Khan, a creative writer, ardent to compose fine writings. Having vast experience in writing blogs, articles, descriptions, and in reviewing scriptures. Currently, works as sr. content writer with Sigma Properties & Marketing.