Are you expecting too much from Pakistan’s real estate sector?

Just a month ago, almost everyone was cautious of making major investments in the property sector but the situation has now changed. With the improvement seen in the stock exchange, along with the Pakistani Rupee gaining value against Unites States Dollar, the zest is expected to transcend to the property sector.

Zameen.com, being the most widely used real estate portal across Pakistan and of course among Pakistanis residing worldwide, too, received reports of investment activity resuming. How does the situation look right now and what is expected of the real estate market in future? Let’s find out!

Impact seen far and wide

The real estate agents registered with the portal from all major cities of Pakistan confirm that they have started to notice investment buzz. They also confirmed a rise in number of potential clients inquiring for appropriate investment options through phone calls and by visiting in person. The vibes are encouraging because the impact is far and wide.

Zameen.com’s sources from Gwadar, Peshawar, Gujranwala, Lahore, Karachi, Islamabad, Faisalabad, Rawalpindi, Multan, Faisalabad, and Hyderabad believe that refusing to invest in real estate at current tempting rates would be hard for many investors. The correction in rates of the property market witnessed during the last two years in the absence of active investors in some cases was as high as 30% lower than the peak rates recorded earlier.

Fortunately or unfortunately, the new deals and projects launched in the last two years were formed to attract buyers with lower rates and attractive payment plans. And many of these offers are still out there to be availed. Furthermore, the dry investment period also brought along a shift in property buying trends, all of which has only made the investment proposition even more rewarding.

What are the expectations?

It is widely believed that the drop seen in the market was due to the new taxation system under which the buyers and sellers had to pay much more in terms of taxes under different heads. The situation stands pretty much the same, does it mean that paying more in terms of taxes is not a problem anymore? Well, that can be true because for many people paying taxes under a more reliable structure of governance means the correct use of money. So yes, for a big number of investors, paying taxes on property will not be a problem. In the meanwhile, the hopes are high for introduction of a taxation system that brings more revenue for the state.

A general sentiment also exists that transparency will be introduced in all the related departments, further increasing the investors’ trust on different sectors. And not to forget, a major rise in foreign remittance is also expected, where along with the money, many Pakistanis having expertise in different skills will head home to help Pakistan do better at various ends, which many consider as the beginning of a new era for Pakistan.

Any hope for a better taxation system?

The real estate consultants and experts believe that expecting such changes to happen right away will be unfair but they do believe that sector-wide reforms for the property market will be introduced somewhere towards the first quarter of next year.

It is also believed that a major attempt will be made by the newly elected government to broaden the tax base in Pakistan and bring more people in the national tax net. This can primarily be done by reducing the tax percentage and increasing the consequences of tax evasion. A similar intervention is expected in the property sector where the percentage of tax will be reduced with perks for filers attached to lure more people to become taxpayers.

Reducing the tax a bit is poised to leave a positive impact on the market. Some decision in this regard is anxiously anticipated.

Which projects look promising?

The real estate market became more receptive for genuine buyers in the recent past. And to attend to their needs, many projects were also designed accordingly where options for smaller plot sizes and availability of convenient payment plan was ensured.

Since most of the transaction recorded in the last two years were for 10-marla and smaller plots, these were also the plot size that saw appreciation in rate. And consequently, the investors also picked to invest in smaller plots. And that’s also true that investment activity continued for off plan properties, where trade volume was seen high for options available on down payment.

So basically, investment was being done but for selective projects in selective areas, and mostly for projects that involved smaller stakes. With many more investors heading to cash on the market sentiments that grew on expectations attached to seeing introduction of promising policies for the country, the same projects will start off with seeing the signs of recovery.

How to go about reaping the benefits?

It will take a while before investment activity for major projects known strictly for being popular among savvy investors can be resumed. But that for new projects where the developer has shown solid on-ground development work will kick off sooner. You will find many such projects in all major cities and spotting them shouldn’t be hard as these essentially interests genuine buyers.

Those playing safe by picking the cheaper options before having major stakes involved should know that investors are already getting busy with buying property in bulk at current lower rates. As and when the new government takes action for the betterment of the economy, you will find out that the rates have already gone been up by a decent margin.

Whether or not you agree with this analysis, your feedback matters. Let us know through your comments about how are you looking to go about investing in real estate sector.