The real estate market is suffering the most in Pakistan. After the inflation, the cost of construction surged almost double, and people are unable to invest in real estate.
The capital city, Islamabad, is surrounded by tons of private societies where real estate agents are waiting for buyers.
In new societies like Airport Green Garden (near the new Islamabad International Airport) and Faisal Hills (Taxila), real estate agents are offering installment plans, but real buyers are hard to find. It is because of the unpredictability of the economy.
Similar situation in the porch area like Bani Gala; the hilltop scenic view from the balcony or the room window was a pleasing idea; now the land value has increased significantly and several societies are offering discounted prices on plots and even on installments, but who can afford installments in today’s crisis is a big question itself.
Before the inflation, the real estate business was flourishing in Pakistan. It will not be wrong to say the only investment plan everyone had in mind was to purchase a plot or a file as a future investment, to cash back when needed after a couple of years, but the dynamics have changed completely since the last two years.
Now Pakistan is economically weak, and the burden of taxes in the form of utility bills, fuel prices, electricity, and gas is on the shoulders of the people. It is difficult to plan a budget for a month and execute it accordingly.
The unpredictable utility bills and every fourth night changing petrol prices have made it next to impossible to dream of owning a house in some decent locality.
The previous PDM agreed to all the terms of the International Monetary Fund (IMF) and shifted the burden to the public. The US dollar price shot up to Rs 320 in the open market, which affected commodity prices heavily.
The automotive industry has been declining for the last 16 months; there’s barely any sales, and even the dealerships are being closed due to a lack of business. A similar situation exists in the real estate business, where land prices have dropped steadily due to low or no demand.
Pakistan is the only country where private societies have a separate block for overseas investors, known as the overseas block. According to real estate tycoons, those who are working abroad send their savings to purchase a plot in these blocks; of course, no foreigner would want to buy a plot in Pakistan.
Keeping in mind the current situation where the government has to pay a hefty amount in the form of loan interest, it is clear that the burden will be shifted to the public over and over again. The growth in the real estate business is stuck due to the expensive raw materials needed to build a house, such as cement, blocks, and other accessories.
Until the next fiscal budget (2024–25), the real estate business will continue to suffer and survive on ventilators; buyers are reluctant to invest in real estate at this time. Will there be any improvement in this business after the budget? Time will tell.
It is advised not to rush and purchase property right now; wait until the new government takes office charge and makes some improvements. It is better to be safe than sorry.
The situation of the real estate market in Pakistan is expected to remain similar for the next 2-3 months.
