State Bank of Pakistan (SBP) recorded the highest total amount of remittances during FY 2020-21. Standing at $29.4 billion, this is the largest sum of foreign exchange ever sent home by overseas Pakistanis. Registering a 27% growth compared to previous year, this was also the highest year on year growth figure recorded in last 18 years. This remarkable influx of foreign exchange drove country’s foreign exchange reserves to $17.23 billion which was also the highest during last four years. Country’s real estate sector, unsurprisingly, absorbed a big chunk of these funds. Consumers & developers noted a certain shift in market as demand for Pakistani real estate continues to move upwards.
According to a World Bank estimate, real estate sector comprises of 60 – 70% of Pakistan’s wealth. Being country’s second largest employment sector after agriculture, its total value can be placed around $400 billion. After a relatively stagnant period during 2019-20, the housing market saw a boom with government easing restriction for both tax filers & non-filers making many investments safe from scrutiny. Several existing as well as new housing societies saw their prices doubled over the period. Consumer confidence definitely helped.
A Pakistani real estate giant reported that roughly 30% of the people searching for Pakistani real estate online are overseas Pakistanis looking to invest their hard earned savings. While, for most Pakistanis, choosing real estate to invest in is a no-brainer but selecting from ever increasing pool of options from within the sector can be a tiresome ordeal. One that isn’t without risks.
With Naya Pakistan Housing Scheme providing easy loans to low income consumers, a visible upward shift in construction sector has also been observed. Though the current volatile economy does carry a systematic risk, next couple of years look promising for Pakistani real estate especially for the investors. Upcoming General Elections will make it an absolute necessity for the ruling party to keep a few success stories to show under its belt. Having struggled with agriculture sector during last 3 years, it is unlikely that the government will take any actions that can potentially undo the success it has achieved in real estate sector. It is reasonable to expect that a number of good things are still yet to come.
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Disclaimer: The views and opinions expressed in this article are those of the authors and do not
necessarily reflect the official policy or position of ZAMZAM Estate & Developers or it’s associates.