The real estate in Pakistan: Prospects and challenges

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Prospects and challenges There has been a slowdown in real estate since 2017 because of political instability and uncertainty of economic and financial policies

Pakistan’s realty state has a large contribution in its economic growth. According to the World Bank estimate, the size of a country’s real estate assets constitutes between 60 and 70% of the country’s total wealth; if these estimates are applied to Pakistan, the estimated size of the real estate sector would be $300 to $400 billion. Because of many financial, economic and political challenges, real estate has not performed well in 2019. But, there are high hopes that there will be high growth in the real sector in 2020.

There has been a slowdown in real estate since 2017 because of political instability and uncertainty of economic and financial policies. Absence of incentives for the investors, imposition of ban on non-filers to buy a property worth more than 5 million unless they register themselves with the Federal Board of Revenue (FBR), FBR’s strict regulation on banking transactions of non-filers, levying of high taxes on transfers of property discouraged the investors to put their money in the sector in 2018-19. Another factor that contributed to slowdown of the real estate is non-utilisation of developmental budget that led to contraction of construction sector and consequently, realty sector.