Is the real estate business profitable in Pakistan

1. Is the Real Estate Business Profitable in Pakistan? Real estate is the most encouraging industry in Pakistan. From the government of Pakistan to private housing entities, everyone keeps coming up with measures to invigorate people’s investment motives. Stats show that this sector is strengthening with every passing day, especially after the Amnesty scheme launched by the Prime Minister of Pakistan. This sector is among very few where profits are guaranteed and there is sustainable growth on investment. Here are different official stats and aspects of the real estate business in Pakistan. The volume of the Real Estate Industry in Pakistan Stats released by the Bureau of Statistics states that only the construction sector from the overall industry of Pakistan roughly estimates 2% of the GDP of the country. And housing/construction is less than even half of the total. In 2020, the worth of real estate in Pakistan was somewhere between $300 to $400 billion. These stats are a bit old; currently, its volume is a lot bigger than 400 Billion Dollars. The Ministry of Commerce conducted a survey recently named ‘Study on the state of domestic commerce in Pakistan’. Here are the highlights of different aspects explored in this survey: ● About 250 ancillary industries (i.e. cement, steel, brick, timber, and building materials) are dependent on the real estate industry making it the 2nd biggest employer of Pakistan after agriculture. ● Pakistan spends $5.2 billion on construction in a year ● The asset market size in Pakistan is $700 billion (head of research at BMA Capital) ● The housing sector accounts for 1.5-3 times of Pakistan’s GDP Housing societies in Pakistan For the past two DECADES, most of the real estate sector comprises housing societies. There are government and semi-government housing societies in Pakistan including Federal Government Employees Housing Society, Pakistan Cooperative Housing Society, societies affiliated with Naya Pakistan Housing Scheme, and a housing scheme by Overseas Pakistani Foundation. As per official figures, there are a total of 8,767 housing societies. But unfortunately, this number includes illegal or unregistered projects too. Roughly 70% (around 6000) of societies do not have NOC. Including both legal and illegal sides of housing societies, the net worth is somewhere between about 15 to 20 trillion rupees. If a society does not have their NOC even years after they first started their operations, chances are high that they are scamming investors or involved in some fraudulent practices.

2. Legislative authorities can do a crackdown on such projects anytime leading to investors' money going to waste without any hope of return. One should duly check the NOC status of a housing society before putting their money in it. Some safe and legal investment prospects in Pakistan are Lahore Smart City, Capital Smart City Islamabad, and Park View City Islamabad. Real Estate Sector and Pakistan’s Economy The stats mentioned prior shows that real estate is the biggest and most profitable business in Pakistan with a major contribution to Pakistan’s economy. Since independence, Pakistan has been facing political turmoil, currency depreciation, a fluctuating economy, and strict financial policies from international organizations. But despite all these facts, the real estate sector always does fine. 2017 to mid-2020 was kind of a slow period for the industry, firstly because of political circumstances and then because of Covid-19, but afterward, it is again on the rise. Inflation, hike in the worth of the dollar, and increased prices of gold in the international market but still, none of this isn't a hurdle in the way of people investing their money in this sector. Prices of plots and residential/commercial units are sky-rocketing and cities are rapidly expanding. Many housing projects' payment plans i.e. Park View City Installment Plan are revised. Real estate investment option in Pakistan There are so many ways one can invest their money or make a profit from real estate but here are some ways more applicable in Pakistan. ● Buying a neglected home, upgrading it, and then selling it for profit. It is often referred to as ‘flipping home’ and can generate very good one-time profit. ● Buying files. ‘File’ is a future plot that will be allocated to the investor in the future. Buying files is a long-term investment option. Once society starts developing, the worth of files also keeps increasing and brings a good profit after a few years. Also, these files can be sold at anytime ● Becoming a landowner and renting it. This is one of the best options as it generates a steady stream of income every month. Also, depending upon the rental agreements, usually rent amount increases annually, which ensures that with rising prices, the income stream also increases. ● Buying plots and reselling them for higher prices. This is one of the most common practices in Pakistan associated with real estate. Investors buy plots and hold them until prices rise due to societies/neighborhood development or any equivalent factor. ● Buying commercial land. Developing infrastructure and then renting it out or personally using it for commercial purposes. ● Becoming a real estate agent ● Buying open and undeveloped land from individuals. This is the riskier option and it starts paying back after several years but once the land is developed, one can sell it for profit. Overview Real estate is undoubtedly one of the most profitable sectors in Pakistan. It adds billions of

3. rupees every year to the Pakistani economy. With new relaxations and incentives provided by the government of Pakistan, now is the best time to invest in residential and commercial properties. If you have any queries about Nova City Islamabad, Lahore Smart City, Capital Smart City Islamabad, or any other prominent society of Pakistan, Deal and Deals (Pvt.) Ltd provides free consultations for everyone.