Do you know that approximately 90% of the money earned by millionaires is through investment in the real estate business? After looking into different business options, we deduce that investing in real estate in Pakistan puts the odds in your favor.
The real estate sector manages to attract the interest of many Pakistanis, but at the same time, it is not an easy task to buy a plot, build it into a house, put up a board saying “home for sale” and finally get it to sell at a higher price.
To have success while trading, you really need to know the basics of real estate investment in Pakistan. These include abundant intelligent considerations and financial know-how as well.
Types of Real Estate Investments
First and most of all, you should know that there is no precise way to define property investment. The entire process comes down to the sale, purchase, or lease of possessions for the purpose of capital gain.
There are numerous types of real estate investments. Here is a list of ones applicable to the property market in Pakistan:
- Purchasing Files
- Purchasing plots for re-sale at a higher value
- Procurement of property to rent out
- Buying open land in expectation of development
Let us further discuss some fascinating facts about the Real Estate Business in Pakistan.
Interesting Facts about Pakistani Real Estate
Coming back to our main headline, we have jotted down some thought-provoking facts that will surely grab your attention and will also be helpful for you in the long term.
By this time, it must be evident that the budget of 2021–2022 has no relation with reality and is just on paper. COVID-19 and Locust Attack act as a serious threat to Pakistan’s economy, and what completes this is another war prediction with India in the picture. This is sufficient for an investor to think at least 10 times before investing. The IMF assumed Pakistan’s economy would decline 15 percent in the coming year, while the government estimate is up by 2.1 percent.
The debt-to-GDP ratio is excessive:
We have all witnessed the rapid boom in property in 2003 and 2013. The debt-to-GDP ratio kept on decreasing in both the booms. The ratio, which was 65% in 2013, has now exceeded 86% and is rising. So, one can very well estimate where the actual price of real estate is heading to.
CPEC (China-Pakistan Economic Corridor):
CPEC is a long route that covers Gwadar seaport, railways, highways, and pipelines. It will further expand to, 3218 kilometers and will act as an effective game changer for the Pakistan real estate industry. It will act as a turbo for Pakistan’s GDP and its economy. Therefore, we can make an educated guess of a huge boom in property charges by approx. 2025. So, in other words, under the tactical value of CPEC, investing in residential or commercial real estate will bring real and true perks for long-term profits.
Secure and Transparent Business:
Security and transparency are the two key components of real estate transactions. The idea of transparency should encompass fair practices, genuine documents, and no secret costs. Many real estate agents have deceived their customers by retailing a house or property at a relatively higher price. This means that you have to do your homework and conduct a thorough market survey to compare the prices.
Convenient Installment Plans:
The majority of commercial projects in Pakistan offer 3 to 5 year programs for buying real estate in installments. This plan consists of a 30% to 40% down payment along with a sum of money to be paid monthly or even on a quarterly basis. The purchaser is not allowed to sell the assets until all outstanding installments are fully paid. This makes it tremendously easy on your pocket to add a new asset to your property portfolio as well. The purchaser does not have to try their luck by making wild decisions, as they can invest in varied property types.
Great Renter Yields:
Purchasing a house, apartment or any commercial property and leasing it out is an “income-generating” trend in Pakistan. Rental yields are much better collected via commercial units. Although, homes for sale in Pakistan’s luxurious areas certainly have greater yields than any low-cost houses. But if you are an owner of any commercial property, there is a huge possibility of getting high-paying tenants. This whole process definitely acts as a constant source of income. Furthermore, these rental values grow with the economy, which in turn translates into lucrative capital values. Again, this all boils down to safety, stability, and security in the industry of real estate.
Property Investment: Pros and Cons
We know that investing in property businesses is not easy for everyone. There are risks with the benefits that are associated with it. At the end of this guide, have a quick look at our table and make your survey complete.
|Value of your assets increases||Prices may not have increased as expected|
|A steady source of income, if rented out||Real estate cannot be liquidated quickly|
|Capable of giving high returns||Possessing property include paying property taxes|
|Can be kept for future personal use||Fraudulent practices may occur|
There is no doubt that the real estate business in Pakistan has been a major input in Pakistan’s economic development. As per the calculation of the World Bank, the scope of the country’s real estate assets is between 60 and 70 percent of the country’s entire wealth; if these statistics are extended to Pakistan, the estimated size of the real estate sector is between $300 and $400 billion
Take out your valuable time to understand every single aspect of Pakistan’s real estate and start looking for investment opportunities. This can be done once you feel you have a firm and secure grip on all the variables.
If you wish to have a deeper understanding of the Pakistani real estate business sector, click: Pakistani Real Estate Terminologies You Should Know