The Pakistan property market is considered the lifeblood of the nation’s economy. According to a statistic published by the World Bank, nearly 60–70% of the nation’s total wealth is invested in this sector. Before we go on to explore the property market forecast 2021 composed by experts at Makeen Marketing, we must try and understand the factors people examine before investing funds into real estate.
Firstly, any investor would consider the economic climate of the country. It is a good idea to observe interest rates, government policies as well as tax policies—all of which influence investment choice. Apart from this, other factors to consider are the location of the property, which housing scheme is gaining traction in the real estate sector, as well as the total layout plans and expanse of the housing scheme. Blue World City, Islamabad Model Town, and Park View City are some up and coming housing societies in Islamabad with beautiful layouts that provide ample amenities to their residents.
Current Property Market Conditions
In order to draw up an accurate Pakistan property market forecast 2021, we must analyze the prevalent economic climate. Due to COVID 19, the situation presented to us operating in the real estate market is unprecedented. While it was predicted that there would be a slump in the real estate sector, analysts at Makeen Marketing have noticed the opposite.
Looking back at this year, we have tracked a steady increase in property rates making this an ideal investment environment for diligent property investors. We strongly urge investors to look into real estate hot-zones such as Karachi, Islamabad, and Lahore for investment opportunities.
Looking back the Pakistan property market trends of 2020, we can see the real estate sector was one of the first to contribute to relief initiatives when the pandemic struck. At the forefront of it all, we see Blue World City, an esteemed housing society, donating nearly PKR 2 Crore towards the Corona Relief Fund. Moreover, it introduced 3.5 Marla cuttings of plots to make investment easier on those belonging to a lower-income bracket. Investors are now able to book plots for less than PKR 1 Lac and pay it off through affordable installments.
The real estate sector has played a monumental role in buttressing the Pakistan property market in these trying times by creating employment for those who have been laid off on account of the pandemic.
Highlights of the Government Budget 2020-21
The Federal Budget of Pakistan was introduced in early June 2020. Going over the budget, it is clear that it was designed with one motive— to uplift the Pakistan property market. Perhaps the highlight of this budget plan is that the PTI government has not introduced additional taxes and fines to any of the sectors of the economy, especially the real estate industry.
The 2020-21 budget plan makes many concessions to the real estate sector including a reduction in the Capital Gain Tax (CGT) period from 5 years to 4 years. A Capital Gain Tax will not be implemented if the property is sold 4 years after the initial purchase.
The REIT Scheme introduced by the Prime Minister promulgates that the Federal Bureau of Revenue will re-evaluate the immovable property rate to make it equal to the market rate. This will be done in an effort to remove all existing taxes on profits earned by the sale of immovable properties in the country. This is a great indicator for Pakistan property market forecast 2021. With the help of this REIT Scheme, residential as well as commercial plots nationwide have seen an increase in transactions.
Another indicator that makes the Pakistan property market forecast 2021 promising is the elimination of a money trail. This is a sign that the strict National Accountability Bureau measures are being relaxed.
Property Market Forecast 2021— Prospects and Challenges
Given the support the real estate sector is receiving from the government, experts at Makeen Marketing deem the Pakistan property market forecast 2021 a conducive one. Apart from all the benefits that the budget of 2020-21 bestows upon the real estate market, the China-Pakistan Economic Corridor is also a project that is thought to drive in more investment into Pakistan’s economy—the real estate sector in particular.
We cannot discuss the property market forecast 2021 without addressing the three main cities where real estate is in a boom.
Karachi has recently seen a switch in administration, having appointed Laeeq Ahmed, a 20th-grade officer of the Secretariat Group as the new administrator of the city. Efforts have been made to make the metropolitan hub a safe place for investment; something that can be witnessed through the rapid increase of cooperative housing societies in the city. These include famous schemes such as Bahria Town, Johar Town as well as Sindhi Muslim Cooperative Housing Society and Al-Jadeed Residency.
The CDA has been working hard to launch esteemed housing societies such as Blue World City, Gulberg Greens, Capital Smart City, and Islamabad Model Town. In addition to the reduction in the aforementioned property taxes, overseas Pakistani’s are able to invest funds into domestic housing societies without fearing an inspection by the FBR. This is another reason why experts at Makeen Marketing deem the property market forecast 2021 to be in favor of the economy.
Lahore saw an increase in real estate prices over the last year and many anticipated positive outcomes however housing societies were not able to report very many investment transactions.
Along with the progress, the Pakistan property market forecast 2021 also predicts a few challenges that the government might run into. The main issue is that the real estate market has been flooded by brokers and dealers with little expertise in the industry— they are unable to guide investors well when it comes to investment choices. Alternatively, they may even try to cheat them out of a good deal. If you are worried about being duped, get in touch with us at Makeen Marketing; we have numerous seasoned real estate agents on board who are dedicated to finding you the best deals possible.
Another issue predicted by the Pakistan property market forecast 2021 is that while there are some really great investment opportunities (especially in Islamabad), developers and builders lose rapidity when it comes to completing a project. This means that many investors have their money tied up in projects that take too long to complete— they may lose faith in the Pakistan property market.
The government must find a way to out investors to ease when it comes to these concerns in order for 2021 to be a good year for real estate investment.