The real estate sector has been under pressure since the government changed the rules of business earlier this month. Pakistan has vibrant real estate market, especially in Lahore, Karachi and Islamabad but sudden decision of the government to ascertain property prices through the valuers appointed by the State Bank of Pakistan has faltered the rally half way. The government had failed to take all the stakeholders into confidence and one sided decision to gauge the value of land instead of the deputy commissioners has marred the property prices across the country. When the government took the decision, it was certainly illogical to go all alone with a plan without consultation with the business community associated with the real estate market. It seems the bureaucracy shuts down part of its mind to understand pros and cons of their decisions. No doubt that there is a huge difference in prices of land set by the deputy commissioners and the actual rates in the market, but slapping a decision without evolving a mechanism always brings disaster. Now the government and the real estate representatives are in negotiation process to reach a decision but the property deals have been virtually stopped across the country at this point.
However, the two sides, the government and the real estate stakeholders, have to avoid any further damage to this sector. At least 40 industries are associated with the real estate sector and slump in property means recession in the whole bunch of industrial concerns. The government wants to enhance its revenues, but its action always create implications in the execution process. If things are left undecided, the investors will start looking for other options and foreign lands are ever ready to welcome investment from anywhere. The performance of the real estate sector improved many fold during the last many years and further growth is expected with investment from foreign clients. Gwadar is emerging as another hub of real estate market and a conducive and helpful environment is indispensable to attract investment from Arab and Iranian nationals. According to newspaper reports, the real estate market in Karachi showed signs of improvement this year and the prices were already on upward trajectory. However, the sudden change in rules have brought the business to a grinding halt.
It is good omen that the private sector is very active in real estate sector and brand names have entered the market. The branded colonies offer all kinds of investment friendly environment and provide almost all amenities of life to the investors as well as those who want to live in a secure and gated environment. The construction of motorways, ring roads and highways have given easy approach to the branded colonies and the ball is now in the government’s court to deal with the situation.
