The real estate sector is potentially one of the most popular among investors in Pakistan. Though mostly ex-pats invest in the real estate sector as it guarantees a profit. Indeed, a large number of remittances, the primary source of foreign exchange for Pakistan, are spent on investment in property. It also contributes to the country’s economy, directly or indirectly promoting dozens of relevant industries and can provide substantial revenue for the government.
Especially since the year 2010, the real estate’s growth has been remarkable, bringing enormous benefits for its investors, as real estate projects sprang up around the country. Requests for regularisation of real estate have followed this increasing growth, and the governments have been making attempts to do just that. Though, an aspect that has so far been overlooked among the policymakers is the demand from the real estate organization that the sector is given the status of an industry.
A look at how the industry situation will affect the real estate Pakistan will provide a more reliable idea about why the demand exists and why it should be considered in the first place.
A look at the contemporary situation of the real estate sector would be revealing itself. The market has been slow for quite a while, and prices had been either steady or decreasing. In the city of lights, there are still other factors to play. Investors have been more cautious, so far. In this situation, the uncompromising dealers have been left to defend themselves and get through the crisis situation on their own.
General Secretary Johar Iqbal of Defence & Clifton Association of Real Estate Agents explained that currently, dealers have many plots that can be considered as capital – worth hundreds of millions of rupees with a significant number of real estate agents who are found in Clifton and Defence itself. But those are just files, and they are worth nothing without the demand. They are in a dilemma because they can do nothing.
If the real estate had the status of an industry, and the dealers could easily get loans at the interest rates of 3% to 4%, then they could start the construction work on their project, get through the slow times and as growth returns to the real estate, their projects will be active and ready to go. Thus they will conveniently be able to return the loans within time as well. This will also create millions of jobs. Additionally, without the status of the Industry – banks are not especially favored to provide loans or offer them at much higher interest rates.
The benefits of the industry status contain:
- They will easily get the loans at KIBOR rates.
- They will get access and representation in industries and chambers of commerce. This will surely help resolve a lot of issues of the real estate sector more swiftly.
- The Real estate sector shall be regulated and registered.
- With more solid documentation and industry status, the approval system will become much more comfortable and more accessible for everyone involved.
- Public trust in real estate will surely increase.
- Companies formed as an outcome will further enhance the situation for all stakeholders as well.
- Companies will be able to build an extensive portfolio and join the stock exchange from which they will be able to sell shares and make funds. As of now, there are only four real estate companies, according to the General secretary, which are registered with the stock exchange. He anticipated that the number is to grow more than eight times.
Furthermore, people from all walks of life have connected themselves to real estate. It is only right that the Industry is given a status that will encourage it to grow further – solely for its great contribution to the public itself.