Challenges of Real Estate Investment in Pakistan in 2022

Challenges of Real Estate investment in Pakistan are coming to the surface as our economy is getting hit by severe challenges at the National and International levels. With the year 2020 being hit by the pandemic, the real estate and construction industry suffered great losses. The purchasing power of the investors went down because of job losses and the closure of the business industry.

Every prediction about the growth of industry proved to be a waste. Almost all the business areas felt the great impacts of the COVID-19. However, 2021 somehow proved to be a year of relief.

With some control over the pandemic, the businesses and industries started opening. Real estate firms and the construction industry also opened. It helped the industry to grow and take the momentum once again. Several projects started and it opened investment opportunities. Investors had a positive reaction to the relief and investments started to pour in. So, overall the year 2021 proved to be a year of remaking or restarting. 

The real challenge now stands for the year 2022. Are investors going to experience any price hike problems? With the new Mini Budget proposed by the current government and all the subsidies taken back, is the industry going to face the real fluctuation with market capital? Many new questions, challenges need to be answered. Let’s start discussing some of the challenges that Real Estate Industry is about to face in Pakistan:

Pakistan’s Economy and Its Role

Pakistan’s economy is passing through a very difficult phase now. With foreign debt rising continuously and shortfalls in budget expenditures, the government has no other option than to impose taxes. Economic losses and gains always affect a wide range of industries across a country. Being hit by the pandemic and then facing many other problems, Pakistan’s economy is on a continuous downfall.

With industries facing problems with taxes and price hikes in many items of use, the prices of almost everything have skyrocketed. During the past 2 years, the prices of commodities are getting out of the range of a normal Pakistani. It is leading to ultimate hikes in the prices of the properties. Although the government has given relief on taxes and construction projects, all other factors are going against the odds.

Mini Budget and IMF

The recent government of PTI (Pakistan Tehreek-e- Insaf) has been under continuous pressure from internal and external factors. For them, the economy has been a greater challenge. Since the day, this government has come into power they are taking steps to take the economy back on track. However, as always, conditions are not favorable and they are passing through the worst phases.  IMF (International Monetary Fund) is playing a great role during these conditions.

The government is trying to get out of the IMF’s grey list by fulfilling all the demands. This has paved the way for excessive taxes. Recently, to come up with the expectations of IMF for a $6 billion loan deal, the government has prepared a Mini Budget. This mini-budget aims at collecting more taxes. The exemptions on GST (General Sales Tax) over most of the items will be abolished just to meet the demands.

This situation is going to put lots of pressure on many areas and industries. Therefore, it is likely that the prices of property will also experience a hike during the year 2022. Moreover, with the construction industry facing acute conditions, the prices of commercial and residential plots are also going to increase. The projects are posing a great deal of investment outlook. However, the conditions concerning the economy do not seem favorable.

Best Strategy to Invest in Real Estate in 2022

As with the prospects presenting acute conditions for the investors and the businesses during the year 2022, investments in real estate can prove to be very difficult. However, to overcome the situation and make the best out of these conditions, it is the right time to invest in Real Estate. The mini-budget is still in progress and the new year has just begun, so the residential and the commercial schemes are presenting easy opportunities to invest. 

Later on, when the situation is going to ease, liquidating the property will become easier and you can get more out of your property. 

Demand for Livable Space as a Token of Profit

With more demands of livable space in the coming years, more and more residential and commercial schemes are going to open. No matter what conditions are in the economy, the construction industry is going to witness a boom. So, investing money in real estate right now will bring fruits in the future. 

The population shift from remote areas to the cities and societies is underway and people are investing more money to avail themselves with a better quality of life. It is eventually going to end up on the bottleneck where investments are ready to flood in. If you invest in the property right now, you are going to get the best out of it in the next few years.

If you are looking for opportunities to invest and overcome the challenges of real estate investment in Pakistan, Hashi GOC can be your best partner. As a rising giant in the real estate business, we are helping ease the investment opportunities for our clients. With residential and commercial projects, we are going to help you from the first step to the last. 

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