Importance Of Real Estate Business In the Economy

Real estate is one of the largest sectors of the global economy. From housing, construction, infrastructure development, and employment creation, it has various roles in a country’s economy. Along with it, numerous industries are directly or indirectly linked with it. Although it is not easy to encompass the adequacy of this sector in the economy, in this blog, we will try to get an idea about the importance of real estate business in the economy. 

Given the rise in population, increased demand for housing, infrastructure, development, and employment has increased the importance of the real estate sector in recent years. It is estimated that by 2040, there will be a demand for 20 million houses in Pakistan. If this demand is filled with proper planning, real estate will be the impetus for economic growth. 

Scope Of Real Estate

Real estate is not just buying and selling property. It encircles housing, construction, hotels, retail, and the list goes on. Infrastructure such as schools, hospitals, airports, roads, industries, etc., falls in its domain. So, its realm covers almost every sphere of the economy.

Importance Of This Sector

This sector plays an important role in the development of a country. It is connected with 40 allied industries and 200 sub-industries. It makes up to 10% of the GDP of Pakistan if we neglect undocumented operations in this sector. 


Unemployment is one of the major issues in developing states. Pakistan is no exception. According to the Pakistan Institute of Development Economies, 31% of youth are unemployed in Pakistan. Although most of the employment opportunities are offered by the private sector, real estate is at the top among them. About 7.61% of Pakistan’s labor force is employed in the real estate sector

Infrastructure Development

Infrastructure is crucial for economic development and the prosperity of a state—all sorts of infrastructure fall under its domain. The real estate sector develops the infrastructure and provides spaces for business activities that ultimately move the economy’s wheel. If a country’s infrastructure is developed, then people from other countries also invest and participate in economic activities. For example, UAE has developed its infrastructure, and foreign investment and other business activities have largely limited its dependency on oil.

Wealth Generation

Real Estate produces large individual and business wealth. If you buy a property, you can make a handsome profit by selling it after some time. The value of land increases over time, and this aspect makes it attractive to investors. Further, real estate advances business activities and creates wealth.

Growth Of Related Industries

The boom in real estate also escalates the growth of other industries. If the property business expands in a country, other industries, like cement, steel, etc., also expand. Considering the recent example of government amnesty to this sector, several other sectors grew, and so was the economy.

Urbanization/ Population Increase

The population of the country is increasing continuously at a higher pace. So, the demand for housing, jobs, and other necessities is increasing. This sector has the potential to manage this rise in demand. It can resolve housing problems, garner jobs, and provide the infrastructure for economic activities.


The country’s real estate sector is thriving and expanding its economic outreach. But still, there is a dire need to revamp the policy-making structure because malpractices restrict its growth. Further, lack of information and regulation is a major issue this sector faces. An overhaul is needed to further its role in the country’s development.

What is GDP?

The annual production of goods and services in a specific area is called the Gross Domestic Production.


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